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Body Corporate
Body Corporate Cover
Body corporate insurance is a type of insurance that provides financial protection for your buildings and all shared common spaces against a range of risks, including but not limited to, fire, flood, storm damage, earthquakes and other unexpected events.
How does body corporate insurance work?
When you purchase a unit within a body corporate, like an apartment, townhouse, or office space, you’re not just buying the walls and the space inside; you’re also buying into a share of the building(s) and its common areas. This shared ownership requires a special kind of insurance, known as Body Corporate insurance.
Do body corporate fees include insurance?
How to get a quote for body corporate insurance?
To get a quote for Body Corporate insurance, you can either apply online or contact us directly to speak with one of our experienced body corporate insurance brokers. We work with a range of top body corporate insurers, including AIG, ANDO, NZI, and Vero, ensuring we can provide competitive quotes that meet your specific needs. By assessing your property details and requirements, we can help you find the best coverage options. Start by visiting our website to fill out an online quote request, or call us to discuss your Body Corporate insurance needs in detail.
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What does body corporate insurance cover?
Building insurance, also known as commercial property insurance, generally covers:
Physical structure
This encompasses any damages to the physical edifice of the building, including the walls, roof, and floors. Coverage is typically provided for damages resulting from unforeseen events such as fires, storms, or vandalism. However, it's crucial to note that certain significant events, like earthquakes or floods, may require specific additional coverage, particularly in certain regions of New Zealand that are more susceptible to these natural disasters.
Additional Structures
Building insurance often extends to other structures connected to the property. This includes structures like garages, fences, and sheds. It's important to remember that the specifics of what's covered can vary from policy to policy, so it's always essential to understand the terms and conditions laid out by your insurance provider.
Loss of rents
For landlords, loss of rents cover provides financial protection if a rental unit cannot be occupied due to damage from an insured event, such as a fire or flood. This coverage ensures that the landlord continues to receive an income stream while the property is being repaired or rebuilt, up to the limits specified in the policy. It helps mitigate the financial impact of losing rental income during the period the property cannot be leased out.
Alternative Accommodation Cover
For owner-occupiers, alternative accommodation cover is provided when the insured property becomes uninhabitable due to an insured event. This part of the policy covers the cost of finding and renting alternative living arrangements while the body corporate is under repair or reconstruction. It ensures that the owner-occupier has a place to live without bearing the out-of-pocket expenses for temporary housing.
Liability Insurance
Body Corporates often include various liability covers to protect against legal and financial risks. Public Liability covers claims for injuries or damages incurred by third parties. Body Corporate Committee Indemnity protects committee members against personal financial losses while performing their duties. Statutory Liability covers potential fines and penalties for unintentional breaches of laws. Employers Liability protects against claims from employees injured at work. These covers are included to ensure comprehensive protection for the Body Corporate, its members, and employees, safeguarding against a range of legal and financial liabilities.
How Do I Calculate the Rebuild Cost of My Body Corporate?
Calculating the rebuild cost of your body corporate is a complex process. It’s more than just a matter of knowing the size of your building and the materials used. It involves a deep understanding of construction costs, building regulations, and even local conditions. Due to this, in most cases, you will need to engage a professional valuer.
A professional insurance valuer is a specialist who assesses the true value of a property, focusing on the cost of rebuilding after a loss. They have expertise in building codes, construction expenses, market trends, and the various elements that affect the reconstruction value of your commercial property.
Utilizing a professional insurance valuer is essential for ensuring that the rebuild cost of your property is precisely estimated. This precision is crucial for determining the appropriate amount of building insurance coverage. It helps to prevent overpayment or underpayment of insurance premiums, leading to financial savings and adequacy in coverage. Their in-depth knowledge and assessment provide a solid foundation for your insurance policy, ensuring it accurately represents the value of your property and protects you against significant financial loss in the event of damage or disaster.
Construction Materials and Costs: The types and quality of materials used in the building’s construction, as well as current market prices for these materials.
Location: The property’s location can affect its value due to varying land prices, risk of natural disasters, and local building regulations.
Building Size and Layout: The total square footage and design of the building, including the number of floors, rooms, and special features.
Age and Condition of the Building: Older buildings may have higher maintenance and replacement costs, affecting the insurance value.
Purpose of the Building: The intended use of the building, whether it’s for residential, commercial, or industrial purposes, can influence the valuation.
Local Building Codes and Regulations: Compliance with current building codes and the potential costs to meet these standards in case of a rebuild.
Risk Factors: Potential risks such as susceptibility to natural disasters (earthquakes, floods), fire hazards, or other threats that could impact the likelihood of a claim.
Assessment of Replacement Cost: The valuer first estimates the total cost to rebuild the property from scratch, using current construction prices. This includes materials, labor, and other associated costs, ensuring the new building would be equivalent in utility and function to the original property.
Evaluation of Depreciation: Depreciation is then calculated based on factors like the age, condition, and expected lifespan of the building. This reflects the wear and tear or obsolescence the property has undergone over time.
Consideration of Market Value: In some cases, the market value of the property might also be considered, especially if it significantly impacts the replacement cost or if the property has unique features that affect its valuation.
Adjustments for Local Regulations and Costs: The valuer adjusts the estimated cost to account for local building codes, planning permissions, and any special requirements that could affect the rebuild process and cost.
Final Calculation of Indemnity Value: The sum insured is then determined by subtracting the calculated depreciation from the replacement cost. This indemnity value reflects the actual worth of the property, considering its current state and market conditions.
While it may be tempting to self-assess or rely on online tools for property valuation, the potential financial risk of inaccuracies far exceeds the cost of hiring a professional insurance valuer. A professional valuer delivers a comprehensive and precise evaluation of your property, guaranteeing optimal insurance coverage. This not only ensures that you are adequately protected but also that you are paying the appropriate amount for your fire services levy, avoiding overpayment.
