QLD: Standard format plan townhouse — can I reduce my contribution to body corporate insurance?

Question: Our Strata insurance covers the building, however I’m responsible to maintain my exterior walls, windows and doors. If this is the case, can I reduce my contribution to the BC insurance?

I live in a townhouse complex that is a Standard Format Plan. As part of my levies, I pay an annual insurance levy which is supposed to cover the building, including external windows and doors. However under a Standard Format Plan, I am the one responsible for the maintenance of both the inside and outside of the building, including exterior walls, windows, doors and even foundations. 

Does this mean that if my unit building is damaged or destroyed, I am liable for its reconstruction, not the body corporate? If this is the case, can I get a reduction of the Body corporate insurance by only paying for common property cover and then pay my own home (and contents) insurance?

Answer: It is important to understand the difference between “responsibility to insure” and “responsibility to maintain”.

In this instance, it is important to understand the difference between “responsibility to insure” and “responsibility to maintain”. This is a common area of misunderstanding in strata.

For strata buildings, the body corporate can be responsible for insuring property that a lot owner is responsible to maintain.

If that property is damaged, then the first consideration is insurance (which is maintained by the body corporate).

If the damage is not claimable (for example the claim is below excess or excluded under the policy) the lot owner then becomes responsible for the cost of that maintenance.

Tyrone Shandiman
Strata Insurance Solutions
E: tshandiman@iaa.net.au
P: 07 3899 5129

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 Advisernet Australia AFSL No 240549, ABN 15 003 886 687.