In response to concerns raised by retirement village residents about the management of insurance within retirement villages, we have received the following information from the Attorney-General’s office.

  • Retirement village scheme operators are required to insure and keep insured, to full replacement value, the retirement village, including accommodation units, other than units owned by residents, and the communal facilities.
  • Retirement village residents are responsible for paying the costs of insurance through their general service charges. Residents also pay the running costs for a retirement village through payment of a monthly general service contribution
  • Increasing insurance costs in retirement villages has remained an issue of concern over the last couple of years and a result of this was the implementation of the Retirement Living Council Insurance Working Group which commenced late 2020. Further information on this can be found at www.propertycouncil.com.au/Web/Content/News/RLC/2020/RLC_insurance_working_group.aspx
  • The Retirement Living Council has been working to find ways to reduce the impact of insurance cost increases on operators and residents for over 12 months.
  • The Retirement Villages Act 1999 specifically details insurance costs, both premiums and excesses as a general service cost payable by residents.
  • The Act also includes insurance costs as a village expense not restricted to increases within annual CPI increase rates, as increases to insurance costs are largely outside the control of a retirement village scheme operator.
  • The Act requires that before a scheme operator increases the amount included in a general services charge that relates to the provision of a particular general service (such as insurance) the scheme operator must consider whether there is a more cost-effective alternative to the general service.
  • The Act also requires that if there is an unexpected increase in the cost of a general service, a village residents’ committee can request an explanation for the increase and the scheme operator must provide the committee with a document that explains the increase.
  • Retirement village insurance policies are considered an operational document under the Act and village residents can make a written request for a copy of an operational document which a scheme operator must provide.

While insurance in general is a Federal Government matter, the Retirement Village Act is State legislation that sets out some requirements for retirement villages in relation to insurance, however it does not directly impact insurance premiums.  We have been receiving reports that insurances across all sectors have risen significantly.  For more information on complaints about insurance, go to www.afca.org.au/make-a-complaint/insurance