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Body Corporate Insurance - How Does it All Work?
When you buy a unit-title property your Body Corporate levies cover some of your insurance costs, too. Unlike private homeowners, bodies corporate are obliged by law to carry full reinstatement insurance. This means the entire complex will be insured under one policy and you can’t insure your own unit yourself.
What Does Body Corporate Insurance Cover?
Body Corporate insurance covers the building and all common or shared property. Insurance of common areas includes areas such as balconies, gardens, lifts, stairwells, car parks, pools, spas and tennis courts.
What Does it Not Cover? Do I Also Need Contents Insurance?
While the Body Corporate insurance will cover the building and all common property, your Body Corporate insurance does not cover your personal possessions – so yes, you (or your tenants) definitely also need to have contents insurance.
The Right Insurance
One of the most important functions of your Body Corporate Manager is to ensure that your complex is insured at all times and that that insurance is fit for purpose.
In reality, a Body Corporate should have insurance designed specifically for Body Corporate needs. Fortunately, Body Corporate specialist Crockers has worked with Gallagher (as preferred broker) to create an insurance programme called Orion Insurance. The Orion package has been tailor-made for the risks and issues faced by multi-owner complexes and has been developed and refined over many years of collaboration between Crockers and Gallagher.
What are the Advantages of Orion Insurance?
Orion Insurance is designed to accommodate the key features of multi-owner complexes which ordinary building insurance does not cover, including protection for owners acting in good faith on their entity’s committee. Crockers is also able to offer a market-leading pricing on this insurance, which is only available to Crockers’ clients.
Orion Insurance Features
Orion Insurance has the following market-leading features:
Policy Wording: The Policy Wording is written specifically to cover the risks relevant to Body Corporate ownership.
Sum Insured: Irrespective of the amount detailed on your property’s insurance valuation, you are covered for:
- Buildings and all improvements: Full Replacement Up to the Valuation - with a maximum of $150,000,000
- Plant, Equipment and Owners’ Fixtures & Fittings of unfurnished residential accommodation: Up to $10,000,000 Replacement Value
- Alternative Accommodation for each residential Owner Occupier: Up to $10,000 per month per unit for 24 months
- Residential Loss of Rents and OPEX for rental properties: Up to $2,000,000 per annum limit per owner; 24 months indemnity period
- Public Liability: $10,000,000
- Body Corporate Committee Indemnity: $1,000,000
- Statutory Liability: $1,000,000
- Employers Liability (where the Body Corporate employs staff): $1,000,000
- Pricing: A combination of Crockers’ buying power and Crombie Lockwood’s scale help us to negotiate competitive prices and favourable benefits and terms for clients.
- Protection: Arranged by Gallagher Insurance brokers and insured by Chubb Insurance New Zealand Ltd.
Check the Orion Insurance website for the most up-to-date information on this market leading insurance.
Insurance Council Warning
Although Body Corporate insurance offers good protection, not all multi-unit buildings have a Body Corporate set up as some are fee simple/freehold. Buying a unit in a multi-unit dwelling that doesn’t have a body corporate could be risky, according to The Insurance Council of New Zealand. Find out more in our article on Buying a unit in a multi-unit dwelling that doesn’t have a body corporate.
If you’d like some further advice on insuring your property or you're in the market for a great Body Corporate manager, contact our Body Corp & Community Living experts on 09 968 3311 or email firstname.lastname@example.org.