A guide for
Body corporates & flood insurance
Kurilpa body corporate committee members, Adrian Sains and Leanne Sturgess, answer key questions for body corporates to explore when it comes to reviewing your apartment’s flood insurance options.
Why would our body corporate consider flood insurance?
Body corporates have a responsibility to purchase insurance. These responsibilities are listed in relevant legislation. For instance, guidance on insurance for Queensland can be found here.
Flood insurance, such as insurance for events where water flows from outside the site, are often not mandatory but a review of relevant legislation is advised.
Reasons for considering flood insurance include:
The property is located within an area of historical flooding based on resident experience.
The property is mapped as being within a flooding area on a government-issued map. For example, the flood awareness map provided by the Brisbane City Council.
Property owners and residents wish to minimise costs from future flood events.
“When this happens again, we won’t have to deal with the same impacts. These are not just financial or inconvenient. They actually affect how people feel about the way they live in this place, in South Brisbane. You don’t want that anxiety hanging over you; you want to feel safe and secure in your own homes. So it’s really important work going beyond just finances.”
Adrian Sains
How would our body corporate understand what our current insurance covers?
Engage with insurance brokers and/or building management on the current coverage of insurance.
Focus on definitions of water damage including the coverage of water that travels onto the site from other sources such as rivers, ground overflow, and groundwater.
Document how any water damage is covered. What type of insurance? What is the coverage and excess?
Note that resident’s cars and contents at risk to flood damage are not covered under a body corporate’s insurance. Consider advising residents to seek personal cover.
“We have 71 apartments across the two towers and seven river homes. The building has two basement levels below ground level. Having that two-level basement means that we need to be aware of what infrastructure we need to protect. It also means we’re more vulnerable when it comes to allowing that basement to flood. We’re on the river so we know that we get tidal influences when the river runs at its peak.”
Leanne Sturgess
How could our body corporate assess our flood risk?
Develop a flood mitigation plan including a flood risk assessment to understand the sources of impact and the potential mitigation options.
Engage an expert, such as a hydraulic engineer to examine potential causes and impacts of flooding.
Know your building. Where are its vulnerabilities? How and why did it fail in previous events?
Consult local flood mapping, for example flood awareness mapping provided by the Brisbane City Council.
“The need for the body corporate to ‘know their building’ is paramount in developing a plan to reduce the impacts of flooding. Works to enhance resilience may include the installation of back-up power supply, drainage and structural work modifications, and purchasing flood barriers. These do not come cheap, so undertaking an informed and robust cost benefit analysis, before committing to any works, is strongly recommended.”
Adrian Sains
What can our body corporate do if flood insurance is unaffordable or unavailable?
Document the likely impacts and mitigation options so that there is clear understanding of the uninsured risk.
Review the mitigation options developed in the flood mitigation plan to understand post-mitigation risk.
Self-insure by establishing an ‘uninsured event fund’ funded through a special levy to unit holders used to fund applicable repairs and clean-up after non-insured events such as flooding has occurred.
If self-insurance is not possible, notify unit holders of the likely extant of costs from flooding events that will have to be funded post-flooding.
“Discussions with insurers are ongoing about how actions to reduce flood and stormwater impacts, and the adoption of a robust Flood Mitigation Plan, may reduce future premiums for stormwater damage.
However, self insurance is still recommended. Even though your building may be more resilient and you're better prepared to mitigate potential damage, flood insurance is likely to be excluded or prohibitively expensive.”
Adrian Sains
Why might our body corporate self-insure?
Money can be raised in small amounts over a longer period, rather than as one big amount when an event occurs.
It shows new buyers you have acknowledged your risk and are taking action to mitigate costs, inconveniences and potential damage.
Self-insurance may minimise the financial burden on top of existing disadvantages and impacts for residents.
An ‘uninsured events fund’ may cover other things that fall through insurance loopholes. For example, insurers may redefine what is and isn’t covered during a flood event, such as damage from overland flow, storm, water damage, and so on.
After an event, you can immediately begin repair works using the funds set aside and avoid waiting for insurance assessments or dipping into a sinking fund.
About Adrian and Leanne
Adrian Sains is a civil engineer who has practiced for over 30 years in river and waterway design and management. He volunteers on the body corporate committee for his Kurilpa apartment complex which has 331 apartments and over 700 residents.
Leanne Sturgess chairs the body corporate committee of her Kurilpa apartment block, which is home to over 140 residents across 71 apartments. She plays a vital role in managing her community’s response to floods, including during the 2011 and 2022 floods.
Other resources
Additional levies as a self insurance for flooding byBCsystems Strata Managers