Body corporates
Body Corporate Insurance, also known as strata insurance or owners corporation insurance, is a type of insurance coverage specifically designed for multi-unit residential buildings or complexes. It protects the shared areas and common assets owned by the body corporate or owners corporation.
In multi-unit residential buildings, each owner holds title to their unit or apartment. The common area of the building, its structure, roofs, lobbies, hallways, elevators, swimming pools and other facilities get shared by all the unit owners.
Lifecycle Fire and General can help to choose the Body Corporate Insurance that covers the common property and assets against risks and perils. It offers financial protection to the collective body corporate or owners corporation.
The title body or owners corporation of a multi-unit residential building /complex can consider Body Corporate Insurance. It is typically responsible for managing and maintaining the common property and assets on behalf of the unit owners. They must ensure that appropriate insurance coverage is in place to protect the collective interests of all the unit owners.
The responsibility for obtaining and maintaining Body Corporate Insurance often falls on the body corporate committee or management, who are elected or appointed to oversee the operations and affairs of the body corporate.
Lifecycle Fire and General are insurance brokers in strata or multi-unit residential insurance. We can provide guidance and assistance to the Body Corporate committee or management in selecting the appropriate coverage and policy for their specific property. Keep reviewing the insurance coverage regularly, especially when there are changes to the property or its usage, to ensure that the insurance adequately reflects the current needs and risks of the building and its occupants.
If you own a flat or commercial unit in a multi-residential or commercial building, you become a member of Body Corporate or the owner’s corporation.
September 2022, the total value of all residential building work across New Zealand amounted to approximately 22.68 billion New Zealand dollars.
The annual number of new homes consented in January 2021 was 39,881, up 5.8% from January 2020.
The House Construction industry has maintained solid revenue growth at an annualised 2.9% through the end of 2022-23 to reach $18.6 billion.
Here are some common types of insurance plans included in Body Corporate Insurance
- Building and Structural Coverage: This covers the physical structure of the building, including walls, roofs, floors, foundations, and common areas. It protects against fire, storm damage, vandalism, and other perils.
- Common Area Liability: This offers coverage for bodily injury or property damage in common areas, such as lobbies, hallways, gardens, and parking lots. It protects the body corporate against claims from third parties, such as visitors or guests.
- Public Liability: Public liability coverage protects against legal liabilities arising from injuries or property damage caused to third parties due to the building or its common areas. It may include coverage for incidents like slips, falls, or accidents within the common property.
- Machinery Breakdown: This coverage protects against unexpected breakdowns or failures of machinery or equipment within common areas, such as elevators, air conditioning systems, fire protection systems, or pool pumps. It covers the cost of repairs or replacements.
- Legal Expenses: This covers legal costs associated with disputes or litigation involving the body corporate, such as legal advice, court proceedings, or mediation. It helps protect the Body Corporate’s interests in legal matters.
- Loss of Rent and Rental Default: In some cases, Body Corporate Insurance may include coverage for loss of rental income due to an insured event, such as fire or storm damage, rendering the units uninhabitable. It may also protect against rental defaults by tenants.
- Fidelity Guarantee: This coverage protects against dishonest acts or fraud committed by employees or committee members of the body corporate, such as misappropriation of funds. The body corporate committee or management should work with insurance professionals or brokers specialising in strata insurance to assess their property’s unique needs and ensure that the policy provides adequate coverage for their specific circumstances.
The coverage provided by Body Corporate Insurance usually includes –
- Building and Structural Coverage: This covers the physical structure of the building, including walls, roofs, floors, foundations, and common areas. All give coverage for car parking, pool area and lift against any accidental loss.
- Common Area Liability: This offers coverage for injury or damage to third parties in the common areas, such as slip and fall accidents or property damage.
- Public Liability: This covers legal liabilities arising from injuries or property damage caused to third parties due to the building or its common areas.
- Legal Expenses: It covers legal costs associated with disputes or litigation involving the Body Corporate.
- Machinery Breakdown: This covers repairs or replacements of machinery or equipment, such as elevators, air conditioning systems, or pool pumps, in the common areas.
- Loss of Rent and Rental Default: This coverage protects against loss of rental income due to an insured event or rental default by a tenant.
- Natural disaster: When the multi-residential building gets damaged due to natural disasters like earthquakes, volcanic eruptions or landslides. This insurance plan gives maximum coverage.
- Fraudulent misappropriation: give coverage against misappropriate use of body corporate funds or assets.
- Worker compensation: It offers coverage against the loss of a worker or injury according to state law.
- Coverage for building improvements: Building modifications performed after the building evaluation get coverage against damage.
The specific coverage and policy terms may vary depending on the insurer and the particular requirements of the body corporate or owners corporation. It’s essential for the body’s corporate committee or management to carefully assess the insurance needs of the property and consult with insurance professionals to ensure adequate coverage is in place.
While Body Corporate Insurance offers coverage for a range of risks associated with the common property and shared areas, there are exclusions and limitations. It does not cover
- The contents or personal belongings of individual unit owners. Each unit owner is responsible for obtaining their own contents insurance to protect their personal property.
- Any improvements or renovations made by individual unit owners within their units. These improvements are the responsibility of the respective unit owner to insure.
- personal liability or legal obligations of individual unit owners.
- Normal wear and tear or gradual deterioration of the building or common areas
- pre-existing conditions or known defects in the building or common areas,
- Damage or losses caused by acts of war, terrorism, or nuclear events.
- Any damage or losses resulting from intentional acts, illegal activities, or non-compliance with laws or regulations.
- Any damage to the hot water system due to external factors.
- Rental loss by tenant fault.
- For removable equipment or machinery.
The corporate committee or management thoroughly review the policy terms and exclusions with their insurance provider to know what is and is not covered. Individual unit owners should consult their insurance providers to obtain appropriate coverage for their personal belongings and liability.
Lifecycle Fire and General offers numerous coverage plans for your Body corporate insurance. There are numerous benefits:
- We offer coverage plans based on square footage. The area damaged by non-natural disasters gets coverage under this policy irrespective of its cost. It helps the body corporate owner to repair or rebuild the damaged area.
- We offer coverage for price surges that involve building area-wise damage due to natural disasters.
- Our plans are customised and offer additional options according to the need of the client.
- We can modify the coverage limits for landscaping and retaining walls for different-sized properties.
- Additional coverage plans for glass doors, windows and sanitary wares.
We understand that each client has unique needs, and we are prepared to tailor our services to meet those needs. Take Lifecycle Fire and General’s suggestions for the Body Corporate insurance plan and live peacefully in your home.