If a Lot in a strata building is damaged by burglary and the OC makes an insurance claim to repair it, who pays the insurance excess? Is it the OC or the Lot Owner? This occurred in a single level shop and none of the common area was affected.
The Act allows the owners corporation to levy an excess to the owner of a lot if the claim has been caused by a culpable or willful act.
Owners Corporation and Other Acts Amendment Act 2021 (the Act) allows the owners corporation to levy an excess to the owner of a lot if the claim has been caused by a culpable or wilful act or the gross negligence of a lot owner, lot owner’s lessee or a guest of a lot owner.
The Act does not specifically speak about instances outside of the parameters set down in the act but past court decisions handed down may provide some guidance.
Case law has found the payment of an insurance excess attracts the benefit principle. It is money paid out to effect a repair, and as such consideration should be given to the person or persons who benefit. In this case, it is reasonable to suggest the lot owner is receiving the benefit because their property was damaged and requires repair.
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Tyrone Shandiman is a seasoned professional in the insurance industry having embarked on his journey in 2004 within the financial services sector. In 2011, he established Strata Insurance Solutions, transforming a garage startup into a reputable firm servicing over 900 clients with a dedicated focus on strata insurance. Tyrone's role extends beyond managing operations and tackling complex insurance matters; he also founded the Australian Consumers Insurance Lobby, championing consumer rights within the insurance industry. Notably, his efforts and expertise have been acknowledged with numerous industry awards. Adding to these accolades, Strata Insurance Solutions was recently named an Australian Top Brokerage by Insurance Business Australia Magazine, a testament to the firm's excellence and leadership in the field. Tyrone is a regular contributor to LookUpStrata.
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