How to Make a Body Corporate Insurance Claim
Step-by-step guide to lodging claims, documentation requirements, and getting faster settlements
Claims Process Overview
A body corporate insurance claim is a formal request for payment to cover damage to the building or common areas. Unlike individual insurance, claims must be lodged by the body corporate committee or manager — not individual unit owners. The process involves documenting damage, lodging with the insurer, assessment, and either repair or cash settlement.
When damage occurs to a body corporate property, the claims process can seem daunting. However, understanding the steps involved and preparing properly can significantly speed up resolution and improve outcomes.
Who Can Make a Claim?
Only the body corporate can make claims on body corporate insurance. This means:
- Body corporate manager — Usually handles claims for managed buildings
- Committee chairperson — May handle claims for self-managed body corporates
- Authorized committee member — With delegated authority
Unit Owners' Role
Individual unit owners should report damage to the body corporate manager or committee immediately. However, they cannot lodge claims directly with the insurer. The committee decides whether to claim based on damage extent, excess, and policy terms.
When to Make a Claim
Not all damage warrants an insurance claim. Consider these factors before claiming:
Claim When:
- Damage cost significantly exceeds your excess
- Damage is sudden and accidental (not gradual)
- The cause is covered by your policy
- Repairs are complex or require professional work
- There's potential for further damage if not addressed
Think Twice About Claiming When:
- Repair cost is only slightly above excess
- Damage may be excluded (wear and tear, maintenance issues)
- Multiple small claims may increase future premiums
- The cause is unclear or potentially not covered
Claims History Affects Premiums
Multiple claims, especially for small amounts, can increase premiums at renewal or make it harder to find competitive quotes. Consider whether a claim just above excess is worth the potential long-term premium impact.
Common Claimable Events
| Event Type | Usually Covered | Notes |
|---|---|---|
| Fire damage | Yes | Including smoke damage |
| Storm/weather damage | Yes | Wind, hail, lightning |
| Water damage (burst pipe) | Yes | Sudden events covered |
| Earthquake | Yes | EQC + private insurer |
| Vandalism | Yes | May need police report |
| Vehicle impact | Yes | Cars hitting building |
| Gradual water damage | No | Maintenance issue |
| Wear and tear | No | Not sudden/accidental |
| Weathertightness/leaky building | Usually No | Pre-existing defect |
Step-by-Step Claims Process
Ensure Safety and Prevent Further Damage
Timeframe: Immediately
- Make the area safe for residents and visitors
- Turn off water supply if there's a leak
- Cover broken windows or roof damage if safe to do so
- Call emergency services if needed (fire, flood)
- Keep all receipts for emergency repairs
Document Everything
Timeframe: As soon as safe to do so
- Take photos and videos of all damage
- Photograph from multiple angles, including wide shots
- Note the date, time, and cause of damage
- Keep damaged items — don't throw anything away yet
- Write a detailed description of what happened
- Get witness statements if applicable
Report to Body Corporate Manager/Committee
Timeframe: Within 24 hours
- Contact your body corporate manager or committee chair
- Provide all documentation and photos
- Explain what happened and when
- Committee will assess whether to lodge a claim
Lodge Claim with Insurer
Timeframe: Within 48 hours of discovering damage
- Body corporate manager contacts insurer's claims line
- Provide claim number, policy details, and documentation
- Receive claim reference number
- Insurer provides initial guidance on next steps
Loss Adjuster Assessment
Timeframe: Within 1-2 weeks for significant claims
- Insurer appoints a loss adjuster for larger claims
- Adjuster visits to assess damage extent
- Provide access and answer questions honestly
- Adjuster estimates repair costs
Agree on Scope and Costs
Timeframe: 1-4 weeks after assessment
- Insurer provides scope of works and estimated cost
- Review carefully — ensure all damage is included
- Negotiate if scope seems incomplete
- Get agreement in writing before work begins
Pay Excess
Timeframe: Before repairs begin or at settlement
- Body corporate pays the agreed excess amount
- Funds may come from operating account or reserves
- Special levy may be needed for large excess
Repairs or Cash Settlement
Timeframe: Varies by complexity
- Managed repairs: Insurer arranges contractors
- Cash settlement: Body corporate receives funds to arrange own repairs
- Ensure work meets Building Code requirements
- Get completion certificates for significant work
Documentation Checklist
Having the right documentation speeds up claims and improves outcomes. Gather these items:
Essential Documentation
Supporting Documentation
Pro Tip: Pre-Incident Documentation
Photograph your building periodically when there's no damage. These "before" images are invaluable for proving the extent of damage when making a claim.
Understanding Excess
Excess is the amount the body corporate must pay before insurance covers the remaining claim. Understanding your excess levels is crucial for claims decisions.
Types of Excess
| Excess Type | Typical Amount | Applies To |
|---|---|---|
| Standard excess | $500 - $2,500 | Most claims (fire, storm, water) |
| Earthquake excess | $10,000 - $50,000+ or 2-5% of sum insured | Earthquake and related natural disasters |
| Flood excess | $2,500 - $10,000 | Flood damage (may be higher in flood-prone areas) |
| Liability excess | $500 - $2,500 | Public liability claims |
How Excess is Paid
The body corporate is responsible for paying excess. Common funding methods:
- Operating fund: If sufficient funds available
- Contingency reserve: From long-term maintenance fund
- Special levy: Emergency levy on unit owners
- Insurance premium financing: Some providers offer excess loans
Earthquake Excess Can Be Substantial
For a $12 million Wellington apartment building with 2.5% earthquake excess, the excess would be $300,000. Ensure your body corporate has a plan to fund this before an event occurs.
Claim Timeframes
Claim duration varies significantly based on complexity and circumstances.
| Claim Type | Typical Timeframe | Factors Affecting Duration |
|---|---|---|
| Minor damage (under $10k) | 2-4 weeks | Documentation quality, contractor availability |
| Moderate damage ($10k-$100k) | 4-12 weeks | Assessment complexity, scope negotiations |
| Major damage ($100k+) | 3-6 months | Engineering reports, specialist repairs |
| Earthquake claims | 6 months - 2+ years | EQC process, land damage, rebuild complexity |
| Disputed claims | 6 months - 1+ year | Negotiation, potential legal involvement |
Tips for Faster Settlement
1. Report Immediately
Contact your insurer within 24-48 hours. Delays can slow processing and raise questions.
2. Document Thoroughly
More evidence = faster processing. Photos, receipts, and written records prevent back-and-forth.
3. Be Responsive
Reply to insurer requests promptly. Claims stall when waiting for information.
4. Get Multiple Quotes
Having repair quotes ready speeds up scope agreement and shows you're informed.
5. Keep Records
Log all communications — dates, names, what was discussed. This helps if issues arise.
6. Know Your Policy
Understanding what's covered (and excess levels) helps set realistic expectations.
7. Use Your Broker
Insurance brokers advocate on your behalf. Use them to navigate complex claims.
8. Escalate When Needed
If progress stalls, escalate to supervisors or use the insurer's complaints process.
Handling Disputes
Sometimes claims don't go smoothly. If you disagree with your insurer, you have options.
Common Dispute Areas
- Claim declined as not covered
- Settlement amount disputed
- Scope of repairs disagreement
- Excess amount contested
- Delays in processing
Resolution Steps
- Internal review: Ask insurer to review decision with additional evidence
- Use your broker: Have broker advocate on your behalf
- Insurer's complaints process: Formal complaint to insurer
- IFSO Scheme: Free independent dispute resolution (Insurance & Financial Services Ombudsman)
- Legal action: Last resort — can be costly and time-consuming
IFSO Scheme
The Insurance & Financial Services Ombudsman (IFSO) provides free, independent dispute resolution for insurance complaints. They can review claim decisions and order insurers to pay if the complaint is upheld. Visit ifso.nz for more information.
Frequently Asked Questions
How do I make a body corporate insurance claim?
Contact your body corporate manager or committee chairperson immediately after discovering damage. Document the damage with photos, then the manager lodges the claim with your insurer. The insurer assesses the damage, agrees on repairs, and processes the claim after excess is paid.
Who is responsible for lodging body corporate insurance claims?
The body corporate committee or body corporate manager is responsible for lodging and managing insurance claims on behalf of all unit owners. Individual unit owners should report damage to the manager/committee, not directly to the insurer.
How long does a body corporate insurance claim take?
Simple claims may be resolved in 2-4 weeks. Complex claims involving significant damage can take 3-6 months or longer. Earthquake claims historically have taken years to resolve for major damage. Timeframes depend on claim complexity, documentation quality, and insurer workload.
What documentation do I need for a body corporate claim?
Essential documentation includes: photos and videos of damage, written description of what happened, date and time of incident, receipts for emergency repairs, quotes for permanent repairs, and any relevant reports (police, fire service). The more documentation you provide, the faster the claim can be processed.
What is the excess on body corporate insurance?
Excess is the amount the body corporate pays before insurance covers the rest. Standard excess is typically $500-$2,500. Earthquake excess is much higher — often $10,000-$50,000 or 2-5% of sum insured. The body corporate must fund the excess from reserves or special levies.
Can individual unit owners make claims on body corporate insurance?
No. Individual unit owners cannot lodge claims directly. All claims must go through the body corporate committee or manager. However, unit owners should report damage promptly so the committee can assess whether to claim.
Will making a claim increase our premiums?
Possibly. Claims history affects premium calculations at renewal. Multiple claims or large claims may lead to higher premiums. Consider whether small claims just above excess are worth potential premium increases.
What if our claim is declined?
If your claim is declined, ask for the reasons in writing. Review your policy wording to understand the decision. You can request an internal review, use your broker to advocate, or escalate to the IFSO (Insurance & Financial Services Ombudsman) for free independent resolution.
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