Insurance: Owner’s Rights
Right of unit & lot holders to satisfy themselves of insurance covers.
Owners have a right to a copy of the insurance certificate and policy for their group.
Legislation – Strata Titles Act
Click on Legislation above, to view strata title legislation and hints.
Legislation – Community Titles Act
Click on Legislation above, to view community title legislation and hints.
Best Practice
Supply all owners with a copy of the insurance certificate following renewal. Ask the group’s insurance company for a certificate if they fail to send one following a renewal.
Detail the insurance cover in the insurance section of the annual general meeting minutes.
Right of Unit Holder to Insure
Owners have a right to effect additional insurance.
Legislation – Strata Titles Act
Click on Legislation above, to view strata title legislation and hints.
Legislation – Community Titles Act
Click on Legislation above, to view community title legislation and hints.
Best Practice
The Corporation ensures that the group is insured for replacement value and obtains a valuation at least every 5 years. This will see owners and their banks comfortable to accept a certificate of insurance from the Corporation.
Supply all owners with a copy of the valuation shortly after it is received.
Strata Titles Act (plan number less than 20,000)
Section 32 of the Strata Titles Act spells out the owners right to see the insurance policy and certificate.
32. (1) A strata corporation must, at the request of a unit holder, produce for inspection all current policies of insurance taken out by the corporation.
(2) A request under subsection (1) may be addressed to the secretary.
What does this mean?
This section of the Act gives owners the right to sight the Corporation’s insurance covers. This can be useful when an owner needs to supply a copy of the insurance certificate to their bank, and for their own peace of mind.
Community Titles Act
Section 108—Right to inspect policies of insurance
(1) The owner of a community lot or a development lot and the registered mortgagee of a community lot or a development lot are entitled to inspect policies of insurance that
are in force and were taken out by or on behalf of the community corporation.(2) The owner of a secondary lot or a development lot in a secondary scheme and the registered mortgagee of a secondary lot or a development lot in a secondary scheme
are entitled to inspect policies of insurance that are in force and were taken out by or on behalf of the primary community corporation.(3) The owner of a tertiary lot or a development lot in a tertiary scheme and the registered mortgagee of a tertiary lot or a development lot in a tertiary scheme are entitled to inspect policies of insurance that are in force and were taken out by or on behalf of the primary or secondary corporation.
What does this mean?
This section of the Act gives owners the right to sight the Corporation’s insurance covers. This can be useful when an owner needs to supply a copy of the insurance certificate to their bank, and for their own peace of mind.
Strata Titles Act (plan number less than 20,000)
Section 43—Insurance by unit holder
(1) Nothing in this Act limits the right of a unit holder to effect insurance in respect of the unit.
(2) A contract of insurance may be entered into by the unit holder in respect of damage to the unit for an amount equal to the amount secured at the date of the contract by mortgages over the unit.
(3) Where a contract of insurance of the kind referred to in subsection (2) is in force –
(a) payment must be made by the insurer under the contract to the mortgagees whose interests are noted in the contract
in order of their respective priorities, subject to the terms and conditions of the contract;
(b) subject to the terms and conditions of the contract, the insurer is liable to pay under the contract:(i) the amount stated in the contract; or
(ii) the amount of the damage; or
(iii) the amount sufficient, at the date of the payment, to discharge the mortgages noted in the contract, hichever is the least amount.
What does this mean?
Section 43 of the Strata Titles Act permits unit owners to take out insurance over their unit.
Example – the mortgagor of a unit (eg: bank) can require the mortgagee (owner) of a unit to take out insurance to the extent of any mortgage they have against their unit. Link to sample mortgagee policy.
Community Titles Act
Section 109—Insurance by owner of lot
(1) Nothing in this Act limits the right of the owner of a lot to effect insurance in respect of the lot.
(2) A contract of insurance may be entered into by the owner of a lot in respect of damage to the lot or to a building or other improvement on the lot for an amount equal to the amount secured at the date of the contract by mortgages over the lot.
(3) Where a contract of insurance of the kind referred to in subsection (2) is in force:
(a) payment must be made by the insurer under the contract to the mortgagees whose interests are noted in the contract in order of their respective priorities, subject to the terms and conditions of the contract;
(b) subject to the terms and conditions of the contract, the insurer is liable to pay under the contract:(i) the amount stated in the contract; or
(ii) the amount of the damage; or
(iii) the amount sufficient, at the date of the payment, to discharge the mortgages noted in the contract, whichever is the least amount.(4) Where the amount so paid by the insurer equals the amount necessary to discharge a mortgage over the lot, the insurer is entitled to an assignment of that mortgage and where the amount is less than the amount necessary to discharge a mortgage over the lot, the insurer is entitled to obtain from the mortgagee a transfer of a proportion of the mortgagee’s interest in the mortgage equal to the proportion that the amount of the payment bears to the amount owing under the mortgage immediately before the payment.
(5) Money received under any such contract of insurance is not liable to be brought into contribution with any other money received under another contract of insurance, except where the other contract of insurance:
(a) is in respect of damage to the same lot; and
(b) relates to the same mortgage debt.
What does this mean?
Section 109 of the Community Titles Act permits unit owners to take out insurance over their unit even in a Strata Division.
Example – the mortgagor of a unit (eg: bank) can require the mortgagee (owner) of a unit to take out insurance to the extent of any mortgage they have against their unit. Link to sample mortgagee policy.
