Body Corporate Insurance Glossary
Indemnity Value
Indemnity value is the depreciated value of property — what it is worth today, accounting for age and wear. It contrasts with reinstatement value, which is the full cost to rebuild. Body corporate building cover is almost always written on a reinstatement basis, not indemnity.
Indemnity-only cover is sometimes seen on older buildings where insurers will not offer reinstatement, or as a fallback when sum insured cannot be agreed. It is rarely adequate for body corporates because the payout will be substantially below the cost to rebuild.
If your body corporate is offered indemnity-only terms, this is a market signal worth investigating — usually it means the insurer has concerns about the structure (often weathertightness, seismic, or claims history).
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