Insurance

In New South Wales the owners corporation must insure the building under a damage policy with an approved insurer. This does not apply to an owners corporation for a strata scheme comprising two lots if the owners corporation decides by unanimous resolution, and the buildings in one lot are physically detached from the buildings in the other lot, and no other building in the scheme is on common property.

Approved insurers are those authorised by the Australian Prudential Regulation Authority for general insurance. We recommend Insurance Aid General Brokers.

A damage policy must cover the building:

• for the replacement (where destroyed) or the reinstatement (where damaged but not destroyed) of the building back to the same condition it was in when new, and

• for the payment for removal of debris and the payment of architects and others whose services are needed for the replacement or reinstatement.

What is covered?

The building includes owners' fixtures and fittings including items such as:

• carpets in common areas
• hot water systems
• light fittings
• toilet bowls
• sinks
• shower screens
• cupboards
• internal doors
• stoves
• common air conditioning systems
• intercom systems

The building must be valued every five years and insured for at least that value.