This article is about organising lot insurance in a gated community.
Question: I live in a gated community with 160 freestanding houses. There are no common walls. Most insurance companies won’t offer insurance. What do we do?
I live in a gated community. It is hard to get insurance. The strata plan is an accommodation module, approx 160 freestanding houses, most on poles. Lot owners own the house and the lot. There are no common walls or roofs. The remainder of the property falls under strata. There is a live-in manager on site. Most insurance companies I’ve approached won’t offer insurance. Not all strata schemes are the same.
Answer: If participation in a voluntary insurance scheme via the body corporate is not possible, we recommend directly applying for home insurance.
Finding suitable insurance can be more challenging for gated communities with freestanding houses, particularly those not sharing walls or roofs.
Strata legislation permits the body corporate to organise a voluntary group insurance scheme for properties without shared walls. However, this approach often stumbles on the requirement by insurers to cover all lots, which can prove challenging to achieve in practice, given all 160 lots must agree to the voluntary insurance scheme.
Given these hurdles, individual lot owners are advised to pursue standalone home building insurance. Many insurers will cover freestanding homes within strata-titled communities, provided the property’s circumstances are clearly communicated. A common issue arises when insurance applications automatically flag or decline coverage upon discovering the property is part of a strata title, primarily due to insurers’ caution against inadvertently covering properties with shared structural elements.
Experience shows that when lot owners, particularly those with standalone homes, clarify their situation—emphasising owners’ obligations to arrange insurance (not the body corporate) under the Body Corporate & Community Management Act —insurers are often more accommodating. This clarification helps differentiate their properties from the more commonly perceived strata units, which share walls and other structural elements.
Therefore, if participation in a voluntary insurance scheme via the body corporate is not possible, we recommend directly applying for home insurance. When doing so, it’s crucial to explain the specific circumstances of your property to the insurer.
Tyrone Shandiman
Strata Insurance Solutions
E: tshandiman@iaa.net.au
P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in the June 2024 edition of The QLD Strata Magazine.
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Read next:
- NAT: Q&A Public Liability Insurance in Australia
- NAT: What are the dangers of underinsuring a strata building?
- NAT: Q&A Yearly Increases To Strata Insurance
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