Who is responsible for paying the strata insurance excess?

Unlike some other Australian jurisdictions, such as Queensland, the legislation does not provide a detailed framework for allocating insurance excesses between the strata company and individual lot owners.

As a result, responsibility for the excess is determined by the particular circumstances of the claim. The strata company should consider what is fair and reasonable in each case, having regard to any relevant by-laws, resolutions, legal advice, and applicable case law.

One principle that has emerged from tribunal and court decisions is the benefit principle. In general, where an insurance claim benefits only one lot, it may be reasonable for that lot owner to bear the insurance excess. Similarly, where damage originates from a particular lot and results in damage to another lot or common property, such as a water leak, it may be reasonable for the owner of the lot from which the damage originated to bear the excess.

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 and the specific coverage afforded under their policy wording. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.