In the ACT, s.100 of our act says:
“1) An owners corporation for a units plan must insure and keep insured all buildings on the land for their replacement value from time to time against all of the following risks: …
2) The owners corporation must take out an insurance policy that covers, to the greatest practicable extent…”
The first bit has a long and comprehensive list of risks and it is clearly the ‘replacement value’ that must be insured. The next bit recognises that it is not possible to find an insurance product that is utterly comprehensive if for no other reason than that they all have some excess to be paid on a claim. The consequence is that Tribunal decisions have made it clear that the OC has to pay the excess on a claim since insurance products without an excess do not exist.