Question: A lot owner reversed their car into common property. The claim for damage was made through the building insurance. Can the Committee pursue the driver for the excess and how?
In 6 industrial units under the Standard Module, each unit has 2 exclusive use car parks. Lot 3 reversed into the front of the building on Lot 42, which is common property. The committee wanted to use the building insurance for the repairs. The driver, who was at fault, wanted to use their vehicle insurance.
The Committee proceeded to process the claim through their building insurance and now the job is complete. The Committee has asked the driver to pay the small excess, but the driver has refused. Can the committee pursue the amount and if so, how?
Answer: Follow the insurer up and confirm the recovery process is underway.
There are a couple of considerations for this issue.
The Body Corporate and Community Management (Standard Module) Regulation 2020 gives guidance on who is liable for an excess for claims that involve lots, but it does not provide guidance on claims that only involve common property – presumably that is because the body corporate is liable.
If an owner wants to lodge a claim on motor insurance (for example because there is a lower excess), this can be facilitated by the body corporate getting the repairs done (or a quote for the repairs) and submitting a letter of demand to the owner to lodge on their motor insurance.
A letter of demand should include:
- Opening statement that you are making a demand (i.e. We would like to submit a letter of demand in relation to a recent incident. If you have insurance the we recommend this letter is sent to your insurer to lodge a claim under the public liability section of your insurance policy.)
- Circumstances of the event (include date & description of damage);
- Why you believe the driver is responsible;
- Summary of costs and a request for reimbursement (include invoices or quotes for repairs with your demand);
- Bank details for reimbursement.
As the claim has already been lodged (and possibly settled), the strata insurer is likely to submit their own letter of demand to the driver and in the event they successfully recover all costs, the body corporate will be refunded the excess.
It is therefore our recommendation in this instance the body corporate follow the insurer up and confirm the recovery process is underway. Not only with they recover the body corporate excess but also costs associated with the claim.
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.
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