A Queensland adjudicator has ordered a strata complex body corporate to take out flood insurance after it planned to renew a policy without the cover. 

A lot owner at the Lake View complex took the issue to the Office of the Body Corporate and Community Management Commissioner, describing the absence of flood cover as “a gamble” and “a very poor decision”.

The matter previously went to adjudication in 2022, when the committee was ordered “to ensure its policy of insurance over the common property and body corporate assets covers water damage due to flooding”.

The body corporate complied with that order but reverted to a policy that excluded flood for 2024-25 when its insurer said it could no longer offer the cover due to the risk exposure. At the most recent annual general meeting, it was decided to renew the cover before expiry on April 16 this year.

The lot owner sourced two alternative quotations from insurers that offered flood cover, but the committee objected, arguing they were more expensive and little building damage would be caused by a flood.

Queensland regulations say the body corporate must insure common property against damage from earthquake, explosion, fire, lightning, storm and water, glass breakage and damage from impact, malicious act and riot.

The body corporate pointed out flood damage is not mentioned, so the cover must be optional.

But the adjudicator says floods cause water damage, which is mentioned, and the body corporate must insure the common property and body corporate assets against damage from water “to the greatest practicable extent”.

“It is plainly not doing that if there is a risk of flooding, flood cover is available and the body corporate elects not to purchase it because it is more expensive,” the decision says.  

The orders, delivered earlier this month, says the cover must be secured within one month.

The decision is available here.