Question: How are claims for water damage handled in our Class B unit complex, especially in cases of multiple rain events?
In our Class B unit complex, where the owners corporation handles building insurance, but individual owners are responsible for their repairs and maintenance, how are claims for water damage handled, especially in cases of multiple rain events causing ongoing damage? Who determines the validity of a claim, and how are the responsibilities between the owners corporation and individual owners defined in such situations?
Answer: Policies will define what an “event” or “claim” is and, in some instances, will provide specific timeframes on when an event stops.
We recommend specific advice from your insurance broker. Policies will define an “event” or “claim” and, in some instances, will provide specific timeframes on when an event stops. If you don’t have an insurance broker, it would be advisable to read the policy conditions defining claims/events and excess provisions.
Tyrone Shandiman
Strata Insurance Solutions
E: tshandiman@iaa.net.au
P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in Strata News #717.
Is it possible for the OC to elect to not take out building insurance on a strata development? I am one of 3 units in a development with no adjoining walls or structures and a very small common area of drive strip to 2 of the units. Also having trouble with strata insurance for the building as the outside walls are EPS panels.
Please see the Q&A above:
Question: For a Class B unit in the ACT, do I need to insure the structure of the building in addition to landlord’s insurance.
Which part of the law states that the Owners Corporation is responsible if the event is insurable but no valid claims can be made because the invoice is under excess?
Our understanding of UTMA2011 is that if the invoice is under excess there is no valid insurance claim. No claim this no excess, thus OC have no business in paying.
The strata company is now saying that they can consult with the insurance company and then the committee can decide tonoay the invoice using general fund. Can the Committee decide to pay for invoices using the general fund for work on private property without any insurance claims ? I have attempt to ask such question to a few groups but no one knows anything of this “insurance under excess” claims.
The reason why we become concern is that a very noticeable non-insurable event was mentioned in a meeting in 2020. Simce then we are very concerned with how the Committee members may be using this as an excuse to use general funds. We have attempt to question the present and past insurance companies and also the insurance broker on how they decide whether it is insurable. To summarise the response I received from all these groups, i would say that unless there is a claim where all these invoices go over the excess and becomes a valid claim. the insurance companies and brokers know nothing unless there is a claim. The strata company claims that the insurance company are the ones that states its payable but no evidence is ever provided.
I was wondering if there are any part of the legislation that allows general fund to be used this way.
Hi Karen
Christopher Kerin, Kerin Benson Lawyers has responded to your question in the above article.
Thanks for the reply. I just saw this answer. My mistake, I initially thought the form below was to send an email enquiry. The above does not answer my question as it was regarding the confusion over the use to general fund of that nature. However I got the answer from another insurer as well as the insurance broker. Is there an email where I can send my questions?
Hi Karen
This is also a question that is of interest to us, ie who pays for what is an insurable event, but when the cost is less than the excess (hence no claim is lodged).
Seems to us this is a very straightforward question, but we can’t seem to get a straightforward answer.
Can I ask you what response you got from the insurer and insurance broker?
Thank you