Question: Our insurance excess has increased substantially. Should we adjust our budget to factor in the increase in excess?
Our scheme has been hit this year with an increase in the water damage excess from $1000 to $10,000 for each and every claim. Does this seem reasonable?
If the $10,000 excess is defensible and presumably based on a poor history of claims for water damage, should the committee start factoring in extra payments for water damage repairs in our annual budget?
Answer: The body corporate should pass the excess on to the person responsible rather than budgeting to pay for it.
Yes, the increase in water damage excess is probably going to be reasonable, particularly if the insurance had a lot of previous claims on that policy. We’ve had a couple of disputes in the last few months where there is a high excess, and it’s unfortunate, but that’s the reality. There’s nothing really anyone can do about it.
I don’t think the body corporate should be budgeting for hire excesses. Typically, if there is a water claim excess and it’s due to something that happened in a lot, the body corporate should pass that excess on to the person responsible rather than budget to pay for it.
Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753
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