Reply To: Individual Building Insurance for B-class (ACT)

No.  This is not being considered as a cost-saving measure.  If the costs are prohibitive as you suggest then we may lose interest.

I think it unlikely that an owner in this complex would not take out building insurance, but to guard against that, perhaps the owners corporation rules could be amended to mandate that.  The units are sufficently separated that fire contagion is no greater a risk than it would be for separate houses, particularly in modern developments with small blocks

This is being considered for a couple of reasons.  Ideally we’d all like to have our building and contents insurance with the same insurer, although our preliminary investigations suggest that could be difficult to do if the usual contents insurers don’t offer building insurance for individual units.  Perhaps they might if this approach were to become more common.

The main reason is that we’d like not to be exposed to the risk association with the other nine units.  We’d like to manage the risk of our own unit. That’s how B-class developments are supposed to operate. There have been a couple of very significant claims in this complex in recent years that have adversely affected our insurance premiums and the associated excesses.  We have sought to manage that risk by taking whole of complex maintenance activities under a special resolution, but this is difficult to do in a coordinated way.  Our view is that it would be easier to do on an individual unit basis, as the specific maintenance requirements vary from unit to unit.

We assume that the ACT Government made this change to the legislation in response to requests from owners coorporations in the ACT, and if so then it seems likely that the motivation was so that unit owners could managed their own risk.  The other possibility is that they were copying other jurisdictions.

In either case, someone must have some idea of how to make this work, which is my main question.