Insurance for Carpets in Units

Why does the Body Corporate’s Building insurance not cover carpets in my unit?

The Body Corporate has a responsibility to take out sufficient insurance to cover the building however, under the relevant legislation pertaining to Bodies Corporate in Queensland [i], carpets are specifically excluded from the definition of “Building”. As a result when a building insurance policy is taken out the insurers do not account for the carpets within the individual units. Carpets within individual units are classified as content and are instead insured under the lot owner’s contents insurance policy.

This issue comes up from time to time where there may for instance be a flood within a unit from the lot above or storm damage to a roof. The building insurance policy generally covers the resultant damage to the building such as walls and ceilings but carpets are not taken into account. It is therefore imperative that owners have sufficient contents insurance in place to protect their individual unit content including carpets.

On occasion we have been asked why the building insurance covers carpets in a foyer for instance but not within a unit. The reason being that usually the Body Corporate insurance will include contents cover for the Body Corporate which owns the contents of the common areas only.

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[i] By way of example see S174 Body Corporate and Community Management (Accommodation Module) Regulation 2008