This week’s question is around insurance costs.
QUESTION: I am a resident in a NSW Northern Rivers retirement village. In the recent heavy rains our village suffered considerable damage and more than half the villas were badly affected. Who pays the Insurance Excess – the Operator or the residents via our Budget?
RVRA ANSWER: The cost of Insurance may be recovered in the Approved Annual Budget of the Village, and be funded from the Recurrent Charges paid by residents (Retirement Villages Act 1999 (s100 (6)). This will also depend on whether the insurance costs have been accepted in the past budgets. However, there is always room for negotiation.
The Operator is required to have insurance which covers the village for damage, costs incidental to the reinstatement or replacement of insured buildings, and public liability. The Residents Committee or the Finance Subcommittee (or a resident if the village has neither) needs to examine the policy. The cost of the premium and level of excess can be discussed and negotiated with the Operator.
It may be worth reviewing your Operator’s Insurance cover and seeing if it is possible to reduce a future excess, but this would be at the cost of increasing the premiums, which are already rising due to the frequency of events such as you describe.
Learn more about the RVRA HERE.
