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Appropriate strata body corp insurance

Discussion in 'Legal Issues' started by Sannie, 28th Dec, 2016.

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  1. Sannie

    Sannie Member

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    Hi All,
    Our starta insurance plan is about to expire in feb17 and we have an invitation to renewal our policy from CHU, I want to review it and make sure we have the right insurance at right price and wanted to cover with a reputable trusted company. If you have done one how did you go about it? the reason it all started was because I just noticed we dont have flood cover and also then office bearers liability which personally puts me in risk as I look after the records, even though I believe I am reasonably good at keeping records in this case. thought this time of year having some time I should spend on it a little.

    It is for a self managed starta corp in SA. Anytips , suggestions like what companies are good to be with kind of things would be muchly appreciated.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Contact an insurance broker who will test the market and come back with their quotations and recommendations.

    Do you need flood cover? Is it not covered because it is located in a flood zone or because it was not required/not at risk? (Some insurance companies cover flood at no cost if yhere is no risk of flooding).
     
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  3. Russ

    Russ Well-Known Member

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    agree, preferably an actual strata specialist insurance broker.
     
  4. jkargent

    jkargent Member

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    Hi Sannie,
    There are a number of big Strata Insurers in the market i.e Strata Unit Underwriters and CHU and in recent years Strata Community Insurance have come to the market and we have seen a shake up in competition as a result of this.

    Office Bearers Liability Insurance is a relatively new level of cover that has probably only been around for the last 18-24 months and is roughly $150+ for about $250,000 worth of cover.

    In terms of flood cover it would be best to contact your insurer and they will be able to advise whether you are in a flood prone area. They are equiped with mapping that factors in areas of low or high risk.

    I hope that this helps.
     
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  5. Russ

    Russ Well-Known Member

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    Oh wow!

    In NSW it still isn't mandatory but I would not be without it if I was on a Strata Committee.

    And our cover levels are more like $1m/$5m/$10m. 80% of payouts under this cover are for lawyers fees defending against accusations. That's nothing to celebrate, but if SA follows NSW poor lead, behaviourally, it will be cover that's worth having.

    (and yes there is a new statutory protection for committee members acting in good faith BUT claims against committee members don't start with the words "in good faith you did [x]")
     
  6. hammer

    hammer Well-Known Member

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    We're in this exact same situation right now. I've just got quotes back from a few different brokers and the differences were huge.

    Dunno if this helps, but here's how we did it.

    Step one. Call up strata insurance brokers and explain the situation. Get a vibe from them. Any broker that doesn't tell you to get a valuation so you're not underinsured you can cross of the list.

    Once you've got your shortlist of brokers order an insurance property valuation. This is an estimate of the rebuild costs.
    Should cost a couple of hundred bucks. Get it past body corp by explaining that without a dead accurate valuation, you could be underinsured and it will be hard to Compare quotes. Get this across the line. It's important.

    Get your valuation done.

    Get your quotes from the brokers using the new valuation, take them to the body corp meeting and choose!

    Usually the winning quote is fairly evident before you go into the meeting....ours all came back around the same price but excess on one was $500 on the other four it was 2k to 5k!!! Guess which one won?
     
  7. How many underwriters are there for strata ? You dont want three brokers chasing same 4 insurers. Some may use same and others may not so check for who they will be seeking to quote. Why brokers often charge a fee now. Excess can be managed by a higher valuation which is so small it wouldnt be seen as overinsurance. Important valuer knows basis of val.

    Good tips. And yes the valuation is important. Some stratas are badly underinsured and basically you may get a further reduced payout for underinsurance. (They scale what is insured back using formula)..And then be incapable of rebuild.
     
  8. jkargent

    jkargent Member

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    HI @Russ - It isn't mandatory, but we do advise our owners that are actively making decisions for their Corporation to take out the cover. It adds them with the piece of mind that should they need to use it.

    In terms of a valuation - It is crucial - I wouldn't want to find out that the Corporation is under insured by thousands of dollars and that it has to come out of my back pocket. I'd rather pay a few hundred dollars for a valuation every 3 to 5 years to ensure that the group is adequately covered. I pass on the same message to my clients.
     
  9. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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  10. Scott No Mates

    Scott No Mates Well-Known Member

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    Agreed - you don't need one every year but every few years will suffice - just like audits, unless there's major expenses, they aren't warranted annually.