Ask Margaret: Do I need flood insurance if I pay body corporate fees?

Hello Margaret,

I have an investment duplex in which I pay body corporate fees, but they do not cover flood damage. Do I need the body corporate or do I get insurance that will cover the lot? And if I have to have a body corporate do I seek an insurance company that will cover for flood only?

Cheers,

Erik Smith.

Erik, I’ve checked this one with Michael Teys, who is my resident expert on Property Success. He tells me that you cannot take out the flood insurance yourself. This is because you have no insurable interest in the common property - this is vested in the owners corporation. The owners corporation is obliged only to insure for fire, lightning and explosion.

Some bodies corporate may insure for flood - remember this is not always available as some insurance companies will not provide flood insurance in some areas -  but they can't be forced to do so.

If you believe that your property is at risk, and you live in an area where flood insurance is available, you should  propose that the body corporate consider adding this insurance cover.  This will then be put to a motion and voted upon by all committee members.

Failing that, I'm afraid there is little you can do. Make sure your contents are well insured though, as anything within your four walls is your responsibility.

I've added the following clarification following queries from readers:

To clarify, any common property, which can include garages, car ports, structures on common land and anything essentially outside of the inner surface of your own four walls is not an insurable  interest for individual lot holders.  Anything inside your walls is, and you should hold all possible insurances to protect your interest in them.