Are repairs of compressor leaks covered by strata insurance?

Whether you can claim the compressor replacement under the strata insurance will depend on the cause of the leak. Insurers generally distinguish between:

• Gradually operating causes such as wear and tear, maintenance issues, or gradual deterioration. Usually, these are considered maintenance matters and not covered by insurance. 
• Sudden and accidental events such as accidental damage or an unexpected insured peril. These are the types of events that may fall within insurance cover.

Most commonly, oil leaks are deemed a maintenance issue rather than an insurable event. However, if the leak has caused further damage, for example, if oil has leaked into the compressor and resulted in a mechanical breakdown, then (subject to the terms and conditions of the policy) there may be potential cover under the machinery breakdown section, if included. In that situation, the wear and tear component may not be covered, but the consequential damage may be considered.

Ultimately, the insurer’s position will depend on what the repairer identifies as the cause of the leak and whether it aligns with the terms and conditions of the insurance policy. A good starting point is to have a repairer provide advice on the cause of damage.

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.