Did you know that many bodies corporate lose money on insurance premiums by skimping on the valuation? In some cases, the reason might be that the body corporate has not met its obligation to obtain the mandatory 3-yearly replacement cost valuation – this usually leads to over-escalating the sum insured by applying the same “on-the-safe-side” escalation rate of 10% year after year.
When a body corporate member suffers a financial loss due to an averaged or refuted claim as a result of under-insurance, the member is likely to seek alternative ways to recover the shortfall. Elected trustees have a fiduciary duty to ensure comprehensive insurance cover and the affected member may consider seeking legal recourse against the trustees.