Insurance by proprietors of strata lots

(1) Where a building is insured to its replacement value under section 6 of the Act, a proprietor may effect a policy of insurance in respect of any damage to his strata lot in a sum equal to the amount secured, at the date of any loss referred to in such policy, by charges charged upon his strata lot. (2) Where such policy of insurance is in force, then, subject to the terms and conditions of the policy, the insurer shall be liable to pay thereunder to the chargees whose interests are noted thereon in order of their respective priorities– (a) the value stated in such policy; or 16 Strata Titles (b) the amount of the loss; or (c) the amount sufficient, at the date of the loss, to discharge charges charged upon the strata lot, whichever is less. (3) Where the amount paid by an insurer in accordance with subregulation (2) is sufficient to discharge a charge charged upon the strata lot, the insurer shall be subrogated to the position of the chargee and shall be entitled to all the rights and advantages of the chargee as against the insured to a transfer of that charge. (4) Where the amount paid by an insurer in accordance with subregulation (2) is less than the amount necessary to discharge a charge charged upon the strata lot, the insurer shall be entitled to an assignment of an interest (to the extent of the amount paid by him) in such charge to secure the amount so paid on such terms and conditions, if any, as were agreed upon under subregulation (7) or, failing agreement, on the same terms and conditions as those contained in the charge by the proprietor. (5) Where a building is uninsured, or has been insured for less than its replacement value, a proprietor may– (a) effect a policy of insurance in respect of any damage to his strata lot in a sum equal to the replacement value of his strata lot less any amount for which his strata lot is insured under any policy of insurance effected on the (b) despite any existing policies, effect a policy of insurance in respect of damage to his strata lot in a sum equal to the amount secured at the date of any loss referred to in such policy, by charged upon his lot, and subregulations (2), (3) and (4) shall apply in respect of any payment pursuant to such Strata Titles 17 policy as they apply to a policy effected pursuant to subregulation (1). (6) For the purpose of subregulation (5), the amount for which a strata lot is insured under a policy of insurance effected in respect of the building shall be determined by multiplying the value stated in such policy by the unit entitlement of the strata lot holder and dividing the product so obtained by the sum of the unit entitlement of all strata lot holders. (7) For the purpose of subregulation (4) and subregulation (5)(b), any insurer and chargee or chargees may at any time, whether before or after a policy of insurance has been effected by a proprietor, agree upon the terms and conditions of the assignment of an interest. (8) The policy of insurance authorised by this regulation and taken out by a proprietor in respect of damage to his strata lot shall not be liable to be brought into contribution with any other policy of insurance save another policy authorised by this regulation and taken out in respect of damage to the same strata lot. (9) Nothing in this regulation shall limit the right of a proprietor to insure against risks other than damage to his strata lot.