Queensland Consolidated Acts

PROPERTY LAW ACT 1974 - SECT 91

91 Amount and application of insurance money

(1) The amount of an insurance effected by a mortgagee against loss or damage by fire or otherwise under the power in that behalf conferred by this Act shall not exceed such amount as is specified in the mortgage, or, if no amount is specified, the full insurable value of the buildings upon the mortgaged land or the amount owing to the mortgagee in respect of the mortgage.

(2) An insurance shall not, under the power conferred by this Act, be effected by a mortgagee in any of the following cases, namely—

(a) where there is a declaration in the instrument of mortgage that no insurance is required;

(b) where an insurance is kept up by or on behalf of the mortgagor in accordance with the instrument of mortgage;

(c) where the instrument of mortgage contains no stipulation respecting insurance, and an insurance is kept up by or on behalf of the mortgagor with the consent of the mortgagee to the amount to which the mortgagee is by this Act authorised to insure.

(3) All money received on an insurance of mortgaged property against loss or damage by fire or otherwise effected under this Act or on an insurance for the maintenance of which the mortgagor is liable under the instrument of mortgage, shall, if the mortgagee so requires, be applied by the mortgagor in making good the loss or damage in respect of which the money is received.

(4) If and so far as a contrary intention is not expressed in the instrument of mortgage, a mortgagee may require that all money received on an insurance of mortgaged property against loss or damage by fire, or otherwise effected under this Act, or on an insurance for the maintenance of which the mortgagor is liable under the instrument of mortgage, shall be applied in or towards the discharge of the mortgage money.

(5) Despite subsection (4) where a mortgagee requires a mortgagor to effect, or consents to a mortgagor effecting, insurance for the reinstatement or replacement value of the mortgaged property, and the mortgagor so insures, the mortgagor may require that all money received or payable on such insurance be applied in reinstating or replacing the mortgaged property.

(6) Any obligation of a mortgagor to insure or continue to insure mortgaged property on a reinstatement or replacement basis shall be suspended if, and for as long as, it ceases—

(a) to be possible to effect the reinstatement or replacement of the mortgaged property; or

(b) to be lawful to use the mortgaged property for a use to which, prior to such reinstatement or replacement, such property was being put; or

(c) to be lawful to use the mortgaged property for such use without the approval of the local government, or other authority having power to grant or withhold approval to such use, and such approval is withheld.

(6A) But subsection (6) shall not relieve a mortgagor of an obligation of insuring mortgaged property against the risk of destruction or damage by fire to an extent not exceeding the current market value of such property as might be destroyed or damaged by fire.

(7) This section applies to mortgages whether made before or after the commencement of this Act and shall have effect despite any stipulation to the contrary.