In Victoria when you purchased your unit you will have received an Owners Corporation Certificate in your Section 32 documentation. This provides all the current insurance details. If the owners corporation (or body corporate in the old language) is not professionally managed you should certainly enquire as to the status of insurance.
Unfortunately, all too often owners purchase their unit and immediately take out building insurance, only to discover that their unit is already comprehensively insured. Not only have they spent money unnecessarily, but have created a potentially dangerous ‘double-insurance’ situation.
The Owners Corporations Act (2006) requires that your strata takes out specialist strata insurance on all the buildings on the Plan of Subdivision. This insurance automatically includes a minimum of $20 million of Public Liability insurance over the common property, which includes the driveway (s).
This comprehensive insurance policy taken out with one specialist insurer ensures the safest and the most cost-effective insurance option. You should be aware that there are some obvious risks if duplicate insurance policies exist.
- The potential for these insurance companies to dispute which company is liable, holding up repairs for a lengthy period.
- The specialist policy will have replacement cover whilst the second policy may simply offer a payout, resulting in that owner having to arrange their own re-building.
- A range of scenarios which can affect two units with a common wall where conflicting insurance policies result in dispute and difficulty.
- Such scenarios are entirely unsatisfactory if the buildings are connected by common property, resulting in the buildings not being rebuilt at the same time, and disputes about who pays for the adjoining walls and services.
All of the above depend on the buildings being adequately insured. If any of the joined buildings are under-insured then the owners may not get their full pay out, meaning they can’t afford to rebuild.
If in doubt, you should contract a strata specialist for advice.