This question is about the reasonableness of insurance excess in a Queensland body corporate.
Table of Contents:
- QUESTION: An owner suffered water damage from roof leaks caused by common property issues, but the body corporate refuses to pay for repairs or the insurance excess. Is this allocation of responsibility correct?
- QUESTION: Cyclone Alfred impacted a small number of unit owners. What should we take into consideration when making a reasonable decision on who pays the excess?
- QUESTION: Our body corporate is only 46% insured, and we have a high water damage excess of $20,000. What are the requirements for the reasonableness of insurance exc
Question: An owner suffered water damage from roof leaks caused by common property issues, but the body corporate refuses to pay for repairs or the insurance excess. Is this allocation of responsibility correct?
I live in a top-floor unit and recently experienced water damage from a weather event, with water entering through the roof. I’m the only unit affected, but the body corporate refuses to cover the repair costs.
They claim that as my unit was the only one damaged, I’m responsible for the repairs and must pay the $5,000 insurance excess if I lodge a claim. I suggested the body corporate submit the claim, but they say it’s my responsibility. They also state that the roof had been inspected before the event, so any resulting damage is not their fault. However, the inspection did not include the internal roof cavity.
I believe the damage resulted from a lack of sarking and an overflowed roof valley, which are both common property issues. I’m feeling frustrated and ignored. Do I have to cover all costs simply because my unit was the only one affected?
Answer: It’s often best to focus on presenting your case clearly and respectfully to the committee, with supporting details.
Responsibility for repairing roof-related damage in a strata property depends on the type of plan your building is registered under. If your property is subject to a Building Format Plan (common in apartment-style buildings), the roof is typically considered common property. In this instance, the body corporate is usually responsible for the roof’s maintenance. If it’s a Standard Format Plan (common in townhouse-style developments), the lot owner is generally responsible for their roof.
It’s worth confirming which format your building falls under by checking the registered plan or speaking to your body corporate manager.
In terms of the insurance excess, Queensland legislation allows the body corporate to determine how an excess is applied. Section 204(4) of the Standard Module (and similar provisions in the Accommodation and Commercial Modules) says that if an event affects one or more lots and common property, the default position is that the body corporate pays the excess, unless it decides it’s reasonable for the owner of the affected lot to pay, or for the cost to be shared.
So, while the committee may point to only one lot being affected, if the event originated from a common property element like the roof, there may be grounds to ask the committee to reconsider its position. The owner can submit a written request asking the committee to assess the matter based on the legislation and what is reasonable in the circumstances.
If the claim falls below the excess amount, insurance may not apply, and any legislative provision regarding excess is not applicable. It becomes a matter of legal responsibility for the damage—a separate but equally important discussion.
In these types of disputes, it’s often best to focus on presenting your case clearly and respectfully to the committee, with supporting details like where the water ingress occurred, what parts of the building were involved, and references to the legislation that supports your position. If the matter remains unresolved, you can also contact the Office of the Commissioner for Body Corporate and Community Management for advice or dispute resolution options.
Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
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.
This post appears in the August 2025 edition of The QLD Strata Magazine.
Question: Cyclone Alfred impacted a small number of unit owners. What should we take into consideration when making a reasonable decision on who pays the excess?
I am the secretary and treasurer of a 30-townhouse residential complex in Brisbane. The complex is under the Accommodation Module. Cyclone Alfred impacted a small number of unit owners. The committee is trying to determine whether those owners should share the insurance excess between them, as the responsible parties for their lots, or whether the body corporate should pay.
The impacted lot owners are less than 25% of the total number of lots. The Regulation states that if the body corporate finds it reasonable, it can require the impacted owners to pay the excess. The decision is further complicated by an upcoming $5,000 insurance increase on 1 July 2025. What options do we have, and what should we consider when making a reasonable decision?
Answer: If repairs could not be attributed to any body corporate failure, it is difficult to see how unaffected owners should contribute to the excess costs.
Deciding on an issue such as this does sometimes afford a reasonable level of discretion. Acting reasonably does not mean that there are mutually exclusive outcomes. For example, it may be reasonable for select owners to bear the excess, and it may also be reasonable for the body corporate to do so.
Many of the disputed decisions on this issue are tied to whether there was a maintenance failure of the body corporate that contributed to the insurance event causing damage. For example, if the water was able to ingress into the lots because of a poorly maintained roof, and the body corporate was responsible for maintaining the roof, it would be typically expected that the body corporate would bear that excess cost burden.
However, if the water ingress could not be attributed to any failure of the body corporate, it is difficult to see how the balance of unaffected owners should be contributing to the excess costs.
Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753
This post appears in the July 2025 edition of The QLD Strata Magazine.
Question: Our body corporate is only 46% insured, and we have a high water damage excess of $20,000. What are the requirements for the reasonableness of insurance excess in a body corporate and isn’t the body corporate required to be 100% insured?
Why is our body corporate only partly insured? My property has suffered severe mould damage due to a burst hot water pipe in the wall. The estimated damage is likely to exceed $50,000.
The body corporate’s insurance has a water damage excess of $20,000, and the claim will only be 46% covered. If the total claim is $50,000, 46% is $23,000. With the excess of $20,000, I only receive $3000.
How high can an excess be for it not to be a burden on owners? Is the excess allowed to be this high? Should the body corporate be responsible for the remaining 54% (less excess)? Doesn’t legislation state the body corporate must be 100% insured for the rebuild value?
Answer: It’s worth noting that there are buildings across Queensland with similarly high excesses due to market conditions and insurer appetite for certain risks, particularly water damage.
Based on the information provided, several important issues warrant clarification under the Body Corporate and Community Management Act 1997 (Qld) (BCCM Act) and the relevant regulation module for the scheme.
1. Requirement to Insure for Full Replacement Value
Under the BCCM Act and associated regulation modules (e.g. Standard Module, Section 198), the body corporate must insure all buildings for full replacement value. A policy covering only 46% of the damage appears to fall short of this legislative requirement.
However, there are provisions in the BCCM Act, Section 189 that allow a body corporate to apply to the Commissioner for an exemption from the full replacement cover requirement where the body corporate can not comply with the requirement under the regulation module applying to the scheme to insure for full replacement value. This exemption is not automatic and must be formally applied for and approved.
If no such exemption has been obtained, the body corporate may be in breach of its obligations.
2. Insurance Excesses and Reasonableness
The question also mentions that the insurance policy includes a $20,000 water damage excess. It’s worth noting that there are buildings across Queensland with similarly high excesses due to market conditions and insurer appetite for certain risks, particularly water damage.
That said, under the BCCM Act, the committee must act reasonably (Section 94). The regulation modules also require that any excess must not impose an unreasonable burden on the owners.
Whether an excess is “reasonable” is subjective and depends heavily on the specific circumstances. For example, if $20,000 was the only excess available from any insurer, this would likely be considered differently than if a $5,000 option was available and the committee opted for the higher excess without due consideration.
3. Responsibility for the Uninsured Portion
The question of whether the body corporate is responsible for covering the uninsured 54% of the claim is complex. It depends on several factors, including:
- Whether the body corporate has applied to the Commissioner for an exemption under Section 189 of the Body Corporate and Community Management (Accommodation Module) Regulation 2008;
- What insurance options were available, and whether the committee acted reasonably in its decision-making?
- Whether there was a failure to comply with legislative obligations to insure for full replacement value.
Due to the subjective nature of these considerations and the need to assess available evidence, it is impossible to definitively determine responsibility for the uninsured amount without more comprehensive information.
Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
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.
This post appears in the June 2025 edition of The QLD Strata Magazine.
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