Question: Is the committee required to estimate building insurance in the annual budget?
Is the committee required to make provision (an estimate) in the budget pursuant to section 150 to cover the cost of building insurance for the coming year, rather than just helping itself to meet the cost of insurance premiums?
The only mention of our insurance costs is the “amount of premium…” in the AGM motion, which applies to the existing policies, but building insurance is omitted entirely from the actual proposed budget.
Answer: Yes, the body corporate must include an estimate for building insurance in the annual budget.
Yes, the body corporate (committee) must make provision in the budget for the expected cost of building insurance for the coming year. Section 150 requires the body corporate to adopt a budget that includes all anticipated expenditure for the financial year, and this necessarily includes the premiums for the statutory insurance the scheme must maintain under Chapter 8.
It’s also important to note that a budget is an estimate only, not an exact prediction of expenditure. The committee must act reasonably in preparing the budget based on information available at the time, but unforeseen circumstances can arise during the policy period. If insurance costs ultimately exceed the budgeted estimate, the body corporate may raise special levies to cover the shortfall.
This post appears in the October 2026 edition of The QLD Strata Magazine.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
