Who insures a townhouse? Body corporate building insurance in a standard format plan

The rule: common walls decide

In a standard format plan (the typical townhouse layout — each lot a building and a yard, boundaries marked on the ground):

• Buildings that share a wall with another building must be insured by the body corporate, for full replacement value. Attached townhouses fall on this side of the line.
• Stand-alone buildings are the owner's own responsibility to insure. If your townhouse doesn't touch another, the scheme's building policy does not cover it — arranging (and paying for) building insurance is on you.

The uncomfortable scenarios write themselves: a scheme that's a mix of attached rows and freestanding villas, where the freestanding owners assume they're on the body corporate policy and never take out their own; or the reverse, attached owners paying for duplicate cover they don't need. The survey plan and the policy schedule settle it — worth checking this week, not after an event.

The voluntary scheme for stand-alone buildings

The legislation offers a middle path: the body corporate can establish a voluntary insurance scheme covering stand-alone buildings whose owners opt in. Participation is optional per owner, and an owner who joins must notify the body corporate of their building's replacement value, comply with the scheme and policy as established, and pay their share of the premium. For schemes with a handful of freestanding lots, one group policy is often cheaper and cleaner than five individual ones — but nobody can be forced in.

What the body corporate insures regardless

Whatever the buildings look like, the body corporate must still insure:

• the common property and body corporate assets for full replacement value — the pool, the shared driveways, the fences and facilities
• public risk insurance over the common property and assets, covering amounts the body corporate could become liable to pay for death, illness, injury or property damage.

So even in a scheme of entirely freestanding villas where every owner insures their own building, a body corporate policy still exists and levies still fund it — it's just covering different things than owners often assume.

Insurance covers damage — not maintenance

The other misconception that surfaces at claim time: body corporate building insurance covers damage from defined insurable events — storm, fire, earthquake and the like. It does not cover maintenance, wear or deterioration. The failing retaining wall, the rusted-out gutters, the roof at end-of-life are maintenance questions, answered by the responsibility rules of the plan type, not by the policy. (In a standard format plan, that mostly means answered by the individual owner — see our guide to maintenance responsibilities.)

The two systems meet in an awkward place after severe weather: insurers can and do contest claims where damage traces back to poor maintenance. A scheme — and an owner — with a documented maintenance history is arguing from records; one without is arguing from hope.

Five minutes of checking, in the right order

1. Confirm the plan type — survey plans via Titles Queensland. No point reasoning from the wrong plan.
2. Walk the walls — which buildings in the scheme are attached, which stand alone.
3. Read the policy schedule against that list — are the shared-wall buildings insured for full replacement value, and are any stand-alone buildings incorrectly assumed onto (or off) the policy?
4. Stand-alone owners: sight your own policy — or raise the voluntary scheme with the committee.
5. Put the answers in the scheme's records — which buildings are covered by which policy is exactly the kind of institutional knowledge that evaporates when the committee changes.

That last step is the quiet theme of everything a body corporate does well: decisions and their basis, kept where the next committee can find them. It's the principle StrataTrade applies to the scheme's maintenance and repair work — every job scoped in writing, quotes returned in comparable form, decisions recorded permanently against the building — so that questions like "why is lot 6 not on the building policy?" are answered by the record rather than by whoever's memory survives the next AGM.

This article is general information about Queensland body corporate law, not legal advice. Insurance requirements differ under some regulation modules and scheme structures, and policies differ in their terms — confirm your scheme's obligations and coverage with your insurer or broker, and seek advice for significant matters.