This response to a lot owner’s question about who pays the excess on a body Corporate insurance claim has been supplied by Tyrone Shandiman, Strata Insurance Solutions.
Question: I’ve had a pipe leak in the bathroom leaving extensive damage that was covered by Body Corporate insurance. Who pays the water damage excess?
Recently I’ve had a pipe leak in the bathroom leaving extensive damage that was covered by body Corporate insurance. However, the $500 excess had an extra $200 water damage excess.
Is the water damage excess covered by the body corporate or the individual lot owner? The water leak was not a hot water pipe.
Answer: If the pipe and damage is within 1 lot, the excess would usually be paid for by the lot owner.
In Queensland, Section 184 of the Body Corporate and Community Management (Standard Module) Regulation 2008 provides a specific reference to who is responsible for the excess.
- For an event affecting only 1 lot, the owner of the lot is liable to pay the excess unless the body corporate decides it is unreasonable in all the circumstances for the owner to bear the liability. Example — If a shower screen is damaged in a lot and an insurance claim is made under the body corporate’s reinstatement insurance, the owner of the lot would be liable under subsection (3) to pay the excess unless the body corporate decides it is unreasonable for the owner to be required to pay it. However, if there is a fire within a lot caused by a short circuit in electrical wiring located in an internal partition, the body corporate might decide it would be unreasonable for the owner to be required to pay the excess.
- For an event affecting 2 or more lots, or 1 or more lots and common property, the body corporate is liable to pay the excess unless the body corporate decides it is reasonable in all the circumstances for the excess to be paid for by the owner of a particular lot or to be shared between owners of particular lots, or between the owner of a lot and the body corporate, or between owners of particular lots and the body corporate.
If the pipe and damage is within 1 lot, the excess would usually be paid for by the lot owner.
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This post appears in Strata News #249.
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. This information is designed as a basic guide with relation to cover and you should refer to your Policy Schedule and Product Disclosure Statement for all terms and conditions related to cover under any insurance policy. 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.
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