Who Needs it?

All owners corporations must take out reinstatement and replacement insurance for all buildings on the common property and for incidental costs of the replacement or repair of damaged common property. This insurance must also cover services shared with a person other than the owners corporation or any of its members, such as pipes and cables for gas, electricity, water or data.

Owners corporations must also take out public liability insurance of not less than $10 million for common property.

Two-lot subdivisions are exempt from these requirements but should take out these forms of insurance if there are buildings on common property.

A prescribed owners corporation must, every five years, obtain a valuation of all buildings it is required to insure.

You are likely to be a member of an owners corporation if you own a flat, apartment or unit. Your ‘body corporate’ became an owners corporation on 31 December 2007, when the Owners Corporations Act 2006 came into force. This law sets out the duties and powers of owners corporations.