The OC has an obligation under section 83 to insure the building under a damage policy. Section 82 sets out what a damage policy encompasses – which includes repair and restoration of damaged parts of the building. I’m not an insurance expert but if you are in a flood area, surely you would have an obligation to insure against that known risk? If so I don’t see how the OC can opt out of it – $180 each is not a lot of money.
Under section 81 the building includes:
(a) owners’ improvements and owners’ fixtures forming part of the building other than paint, wallpaper and temporary wall, floor and ceiling coverings…
Which means that the policy would not cover a range of things inside a lot that may be damaged in the event of a flood, like carpet, but would cover certain other items. So ideally the OC would take out insurance which would be supplemented by the owners taking out insurance to cover what isn’t covered by that policy.