Part 8 Insurance

The body corporate is taken to have an insurable interest in property that it is required by or under this Act to insure.

(1) The body corporate for a strata scheme must take out and maintain a policy of insurance for the buildings and other improvements (if any) on the site in accordance with this section.

Penalty: Fine not exceeding 50 penalty units.

(2) The policy of insurance –

(a) must cover –

(i) damage from fire, storm, tempest or explosion; and

(ia) any other prescribed risks; and

(ii) costs incidental to the reinstatement or replacement of the buildings, including the cost of removing debris and the fees of architects and other professional advisers; and

(b) must provide for the reinstatement of the buildings and improvements to their condition when new.

(3) The body corporate for a community scheme must insure property in accordance with the requirements (if any) of the scheme.

(3A) A body corporate may insure against –

(a) loss from dishonesty, negligence or other wrongful conduct; or

(b) other risks.

(4) Despite any provision of the policy of insurance but subject to subsection (5), the body corporate (and not the owner of a lot) is liable to pay an amount payable, by way of excess, under the policy taken out by the body corporate under this section and any contribution that has to be made to the cost of reinstatement or repair because the insurance is not for the full replacement value of the insured property.

(5) If an amount payable by way of excess under a policy of insurance taken out by the body corporate under this section arises from an event affecting only one lot, the owner of the lot is liable to pay the excess unless the body corporate decides, by ordinary resolution, that it would be unreasonable that he or she alone be required to pay the excess.

(6) If an insurer of the body corporate accepts a claim by the body corporate based on an act or omission by an owner of a lot, the insurer has no right of subrogation in respect of the owner unless it is proved that the act or omission was wilful.

(7) It is a defence to a charge for an offence against subsection (1) if the body corporate can show that, despite the body corporate having taken all reasonable steps available to it to comply with that subsection, no insurer is willing to enter into a policy of insurance, on reasonable terms, that meets the obligations imposed by this section.

(1) If the body corporate is unable to obtain insurance for a building or part of it on reasonable terms because –

(a) the owner or occupier of a lot is carrying on a particular activity on the lot; or

(b) work is required in relation to the lot to reduce the insurance risk to a reasonable level –

(2) A notice under this section must give the owner the option of paying any additional insurance premium payable in the event of the continuance of the activity, or the non-performance of the work.

(1) A body corporate must maintain public risk insurance (covering accidental death, personal injury and property damage) over the site for an amount at least equal to a minimum prescribed by regulation.

(2) ........

(3) ........

(1) The owner of a lot may enter into a policy of insurance insuring the lot for an amount equal to the amount secured at the date of the future loss to which the policy relates by mortgages over the lot.

(2) If such a policy of insurance is in force –

(a) payment must, subject to the terms of the policy, be made by the insurer to the mortgagees whose interests are noted in the policy in the order of their respective priorities; and

(b) subject to the terms and conditions of the policy, the insurer is liable to pay –

(i) the amount stated in the policy; or

(ii) the amount of the loss; or

(iii) an amount sufficient, at the date of the payment, to discharge the mortgages –

(3) If the amount so paid by the insurer equals the amount necessary to discharge a mortgage over the lot, the insurer is entitled to an assignment of the mortgage, and if the amount is less than the amount necessary to discharge a mortgage over the lot, the insurer is entitled to obtain from the mortgagee a transfer of a proportion of the mortgagee's interest equal to the proportion that the amount of the payment bears to the amount owing under the mortgage immediately before the payment.

(4) Money received under such a policy of insurance is not liable to be brought into contribution with any other money received under another policy of insurance, except where the other policy is in respect of damage to the same lot and relates to the same mortgage debt.

(1) If a body corporate is in breach of its obligation to take out and maintain insurance, the owner of any lot may take out and maintain the required insurance.

(2) The insurance may be taken out in the name of the body corporate or in the owner's name.

(3) The costs incurred by an owner under this section may be recovered from the body corporate as a debt (and may be set off against any liabilities of the owner to the body corporate).

(1) The body corporate must at the request of the owner of a lot produce for inspection by the owner the policies of insurance currently maintained by the body corporate under this Act.

(2) The body corporate need not comply with a request under this section if it has previously produced the policies of insurance for inspection by the person making the request and the request is not, in the circumstances of the case, reasonable.