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Is the unit covered by Body Corporate insurance?

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  • Is the unit covered by Body Corporate insurance?

    Hi all,

    if a tenant causes a fire in the apartment, would the unit and and fixtures be covered by the body corporate insurance?

    thanks

  • #2
    Good question. I recently raised with Tenancy Services the issue of tenant liability / contents of the required insurance statement in a BC situation. TS were responsive but there was a false start with information (to me) later retracted as they took legal advice. TS has since said this -

    '... if the rental property is part of a body corporate, landlords will need to include insurance information that is relevant to the tenant’s liability for damage of both the rental property itself, and the shared facilities....'

    The TS website and insurance statement is to be updated before Christmas. Will have to see what the update says, but the above does not give useful information to the owner or answer your question IMO. I think an insurance claim would need to be lodged through the BC then determine next steps based on their reply.

    I assume BTW that tenant liability for careless damage is on an event basis. Given that insurance companies are keen to collect the excess on each event wouldn't that mean tenant liability is lower of 4 weeks rent or insurance excess for each event. As an example, there have been Tenancy Tribunal cases where pet damage to carpet is ruled careless, and insurance company rules each damage item is a separate event. Or holes in walls. Kachinggg!

    If there are any insurance experts on the forum, input would be very helpful.

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    • #3
      I suggest you ask for a copy of the insurance policy from the BC admin. A summary is most likely included with the AGM minutes/ agenda since the AGM is usually when it is agreed which company to go with. they all have different terms & conditions.

      I had an experience where the dishwasher on the top floor flooded, with water flowing down through bedrooms below.
      The insurance paid for some of the repairs, with an excess for about $500 i think (I did some of the repairs myself, painting etc including throwing out the dishwasher, so claimed my costs against the excess.)
      It was a nightmare having to liase btween the BC admin, the insurance appointed manager & the tenants.
      Despite the cover including alternate accomodation if the property becomes uninabitable, this only seems to apply to owner occupiers, not tenants, so in the case of a tenant "accidentally" setting fire to a unit, there is likely an issue of who pays for the altenate accommodation. This is something you need to find out from your insarance co.
      In the end your unit "structural" items would get repaired, but what contents get replaced will be policy specific, as will the excesses as mentioned above. Fortunately precendents have now been set that mean carpets are counted as "structural" regardless of being glued, nailed or smoothedge fixed to the floor.
      A policy i have for a standalone property includes landlord chattels, but not sure for the policy in a BC situation. That leaves open the damage to tenant chattels, eg flooded/ burnt tv, laptop, washing machine, drier etc.

      This whole area is so poorly and inconsistently covered, and the limiting of tenants liabilty has just made it even more uncertain.
      Food.Gems.ILS

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      • #4
        Thanks all for the answers. I checked the BC insurance policy and it states that extensions include Landlords Fixtures and Fittings. So does this mean that unit walls are also covered?
        Also, the policy does not specify a cause of the damage, i.e fire or flood. Does this mean that the cause should not be a relevant factor when making a claim?

        thanks

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        • #5
          I am also interested to know the answer to this, i have a unit in a Body Corporate and they have insurance. However, reading the policy it states that it excludes landlords fixtures and fittings.
          So, I rang an insurance company to ask about how to get insurance for that - and they said they dont touch things in these cases, and that we are better off to call a broker (which i will do... but in the mean time... interested in discussion!)

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