When is it reasonable to get flood cover? The answer may shock you!

There is a provision contained in all 5 of the regulation modules under the Body Corporate and Community Management Act 1997 which states that the body corporate must insure, for full replacement value, the common property and body corporate assets to the greatest practicable extent against damage.

In the case of Lake View, a 6-lot scheme in Palm Beach on the Gold Coast, a dispute arose between a lot owner and the scheme's cost-conscious committee because the committee took out a policy of insurance which did not cover the Body Corporate for flood damage.

The reason given by the committee for not taking out flood cover?  The insurer didn’t offer it and other quotes were more expensive.  Why was it not offered by the insurer?  Because of the potential for flooding.  You can probably see where this is going.

The lot owner's application was successful and the body corporate was ordered to take out a policy of insurance which includes flood cover.

So when is it reasonable to get flood cover?  When there is a risk of flooding.  Sometimes the law is simple after all.