Building Insurance: Sample Request and Assembly Resolution

Two Different Policies, Two Different Responsibilities

Two types of insurance are often confused in apartment buildings:

• Compulsory earthquake insurance: arranged separately for each unit and the owner's responsibility. The management is not obliged to arrange it collectively, though following up and reminding owners is good practice.
• Common area / building package policy: covers shared areas, the lift, installations and damage that may be caused to third parties. It is arranged by assembly resolution and the premium is shared as a common expense.

Under Article 35 of the Condominium Law, insuring the building is listed among the manager's duties. Because the premium is an expense, however, the scope and cost of the policy should be decided by the general assembly.

What Should the Common Area Policy Cover?

• Fire, flood and internal water damage in common areas
• Damage arising from the lift and mechanical installations
• Glass and façade damage
• Third party liability (accidents in common areas)
• Employer's liability (where a caretaker is employed)
• Debris removal costs

Third party liability cover in particular should not be overlooked; it responds to the management's liability in events such as a fall in a common area or damage from a falling component.

Copyable Insurance Request Letter

……………………… APARTMENT / COMPLEX

TO THE MANAGEMENT / CHAIR OF THE GENERAL ASSEMBLY

Subject: Request that the common areas be insured.

I am the owner of independent unit no. …… in ……………………… Apartment/Complex.

At present ……………………… (there is no insurance policy in place for / the existing policy provides inadequate cover for) the building's common areas, lift and installations.

Under Article 35 of the Condominium Law, insuring the building is listed among the manager's duties. Without a policy, fire, flood, lift accidents or damage caused to third parties in common areas will fall directly on the owners.

I therefore request:

1. That quotations be obtained from at least three insurers,

2. That the proposed policies, with their scope of cover and cost, be placed on the general assembly agenda,

3. That the policy include at least fire, internal water, lift accident, glass breakage and third party liability cover,

4. That the premium be included in the operating budget as a common expense.

I submit the above for your consideration. …/…/20…

Full Name: ………………………    Unit No: ……    Signature: ………

Copyable Assembly Resolution Sample

……………………… APARTMENT / COMPLEX

GENERAL ASSEMBLY RESOLUTION

Resolution No: ……    Date: …/…/20…

Agenda item: Insuring the common areas.

RESOLVED: That a policy issued by ……………………… Insurance covering the building's common areas, lift and mechanical installations, with the cover set out below, be taken out at an annual premium of ………… TRY.

Scope of cover:
– Fire and lightning
– Internal water and flood
– Lift accident
– Glass breakage
– Third party liability: ………… TRY
– Employer's liability: ………… TRY
– Debris removal

Policy period: …/…/20… – …/…/20…

The premium shall be allocated among the owners in proportion to land shares pursuant to clause …… of the management plan and entered as a separate item in the operating budget.

The manager is authorised to renew the policy before each expiry and to review the sums insured against the current value of the building.

Owners were reminded that compulsory earthquake insurance must be arranged separately by each owner for their own unit.

The resolution was adopted with ……… votes in favour and ……… against.

Chair ……………… Signature    Secretary ……………… Signature

Filling Guide

State the sums insured in the resolution. Simply resolving "to take out insurance" leads to a cheap policy with inadequate cover.

Show third party liability cover as a separate line. It is the most frequently omitted and most useful cover.

Include authority for the manager to renew the policy each year; otherwise a fresh resolution is needed annually.

In the Event of a Claim

Notify the insurer within the period set in the policy. Late notification can reduce or defeat the claim.

Do not start repairs before the loss is assessed, and take dated photographs. The loss adjuster's report, invoices and incident records should be kept on file.

Common Mistakes

• Confusing earthquake cover with the common area policy: different scope and different responsibility.
• Choosing purely on price: policies should be compared on cover, not cost alone.
• Omitting liability cover: the most critical cover for accidents in common areas.
• Not tracking renewals: an expired policy provides no protection.
• Late notification of a claim: can lead to rejection.

This content and these templates are for information only and are examples. Cover varies by policy; compare terms when obtaining quotations.