[This post has been edited to take in the more informed views (below) from Austman – who lives in Victoria]
Your neighbours are right, in that the Insurance company probably has no liability for the results of age, wear and tear.
The whole structure may be common property and, as such, under section 46 of the Owners Corporation Act (2006), the Owners Corporation (you and the other owners in the block) MUST repair and maintain it – no ifs, buts or qualifiers. [See Austman’s post below]
The only way the OC would not be liable would be if the original plan or special by-laws gave responsibility for the common property to the individual lot owners (not impossible).
If this is an Owners Corp liability, your real problem will be the OC saying they don’t have the money (they can get a loan) or asking you to wait while they see who else needs the work done (your call on that).
But the bottom line is, if it’s common property they have to fix it. And if anyone is injured in the interim, it’s the OC’s responsibility – and people who delayed the remedial work could be held personally responsible.
Time to gather all the facts about who owns what (again, see Austman’s post) and then organise a sit-down and a calm chat with your neighbours.