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Topic
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Hello Jimmy
On 20 August I posted a question about the valuation for which our strata buildings should be insured as follows:
My request was as follows:
Our strata property consists of 19 lots consisting of 3 commercial units (separate building), a unit block of 6 units with garages at ground level (separate building) and 10 townhouses. According to the Act the OC has to insure its buildings for at least the latest valuation, which in our case was done November 2013. My interpretation of the Act is that if our building(s) are destroyed we are compensated by the amount of cover, which doesn’t necessitate rebuilding the same as was destroyed. Our strata plan covers a relatively large block of land in the inner city where, over the last 15 years, all but a few blocks like ours, are now highrise. In all likelyhood this will happen to our land in due course. The question is: do we have to take into account CPI increases or other cost increases when taking out insurance or can we, legally, insure at the latest valuation for, say, the next 5 years?
I would like to get a comment to share with the EC.
Thanks
Jef
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Replies
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The answer to this is in your insurance policy, not the Act. If it’s a like for like, insurance, then you are covered. If it’s based on the valuation, then you may have to consider things like CPI but I don’t think that’s as relevant as having an effectively vacant site (in the event of a catastrophe) available to developers.
Policies differ. Our building is insured for a rebuild … but not necessarily on the current site. And bear in mind that while material and labour costs will rise, building techniques are constantly improving and you could conceivably end up with a better replacement building that cost less that the original.
But your first port of call should be the insurer who will explain exactly what you are being insured for.
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I agree and think that it’s time for you to dig out your agreements and documents from storage and really scrutinise the terms of the contract when you signed for your apartment. But honestly, I think you’re going to want your own insurance just in case something on their side isn’t as comprehensive as you would like it to be. They are only obligated to a certain extent anyway.
@melbrandle said:
But honestly, I think you’re going to want your own insurance just in case something on their side isn’t as comprehensive as you would like it to be. They are only obligated to a certain extent anyway.This is about compulsory building insurance that must be taken out by owners corporations for the replacement cost of their buildings in the event of a disaster. It is not appropriate or, I suspect, possible for individual owners to take out their own insurance for their share of the structure. However, different insurance policies form different companies may offer different levels of cover.
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