CrashAndBurn:

 

Wheelbarrow01:

 

To answer your original question "How does apartment insurance work?", the answer is sometimes it doesn't.

 

This case study of an apartment block that suffered damage in the Canterbury earthquakes illustrates my point beautifully.

 

11 out of the 50 apartment owners died whilst waiting for the insurance payout. The insurance company has since settled with (and paid out to) the body corporate, but now the remaining owners are arguing over who will get what, and without a unanimous decision it's likely heading back to court.

 

 

This is interesting as one of the documents provided to me shows how much percentage each unit pays in terms of the BC levy. I thought it would be as easy as using the same percentage when splitting the insurance payout?

 

I'm thinking that in that case, there are probably a whole lot of complications...

Some of the apartments are still standing and have been occupied either by the owners, or rented out - others had to be vacated immediately.  If they'd been habitable, then 8 years x say $500/week, the owner's had $200,000 rent or "rent value" out of them, owners of "red-stickered" or demolished apartments would have received nothing at all - but still paid rates etc.  Had the whole thing been settled in a timely fashion, then I assume that the entire site would have been sold "as is" and levelled many years ago.

If settlement had been delayed by owners who were receiving $500/week rent for a property which was essentially "valueless" - but were going to receive the same share of the insurance payout, and you were still paying rates, BC fees etc on a property that had been demolished many years ago, I can understand that people might be digging in their heels.