These articles cover some FAQs about strata insurance QLD. Answers have been provided by Frank Higginson of Hynes Legal, Tyrone Shandiman of Strata Insurance Solutions and Lia De Sousa of Whitbread Insurance Brokers.
Question: Our body corporate manager has slapped me with a fee for processing the insurance claim. Shouldn’t any administration fee for processing an insurance claim be billed to the body corporate?
If an insurance claim is placed with the strata insurer for vandalism to office doors, I understand I am required to pay the $1,000 excess, as the doors lead to my office.
However, the body corporate manager has also slapped me with a fee of $82.50 for processing the insurance claim. She didn’t actually do anything, as I placed the claim with the insurer.
For strata insurance in QLD, shouldn’t any administration fee for processing an insurance claim be billed to the body corporate?
Answer: The body corporate manager may well be entitled to charge a fee under their management agreement for processing insurance claims but that fee is going to be payable by the body corporate – not the lot owner concerned.
In accordance with Body Corporate & Community Management Act regulation, 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.
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.
This information about strata insurance QLD 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 Advisernet Australia AFSL No 240549, ABN 15 003 886 687.
The body corporate manager may well be entitled to charge a fee under their management agreement for processing insurance claims but that fee is going to be payable by the body corporate – not the lot owner concerned.
This post appears in Strata News #176.
Question: I am an owner occupier of one half of a duplex in FNQ. The other half is used solely for short term letting. I feel it is not fair that I need to pay more for my share of strata insurance due to the need for short term letting insurance.
We are a 2 lot Body Corporate complex. Ownership is 50% – 50%. One half of the duplex is owner occupied and the other half is being solely used for Airbnb.
Our current insurance does not cover short term letting.
Only one insurance policy was offered to us, as we found that most strata insurances do not offer Short Term Letting insurance cover.
The Short Term Letting insurance cover (commercial insurance) brings with it an enormous increase in the excess. In the case of a cyclone, the excess goes from $200 currently to $20.000! In some cases, it goes up from $1000 to $5000 per event.
As we could not agree on this new policy, we went through BCCM conciliation and later Adjudication. It was ruled that we need to commit to a commercial policy with the enormous excess.
I feel this is very unfair, as I have no need for the commercial insurance and in the case, I need to make a claim, I will be anywhere between $900 to $19800 worse off then I would be with our current insurance.
Are you aware of any similar cases or do you have any suggestions on which insurance company offers short term letting strata insurance in Far North Qld?
I have tried to get quotes from many brokers, but to no avail.
Answer: All bodies corporate in Queensland must insure – no matter how unpalatable that policy or its conditions might be.
Frank Higginson, Hynes Legal:
As a building format plan of subdivision, the body corporate is required to insure the building for the full replacement value. A lot owner cannot stop the other owner from short-term letting their lot via the body corporate and, consequently, the insurance policy of the building needs to cover this activity to meet the legislative requirements.
I have taken a look at the adjudication decision (Beach Meet  QBCCMCmr 39), and it seems that in this case, the lot owner sought an order that alternative cover be obtained, but was unable to find an appropriate alternative insurance policy after exhaustive attempts. The adjudicator could not make an order that would be impossible to adhere to and that is why you are stuck with the proposed insurance policy with the higher excess. All bodies corporate in Queensland must insure – no matter how unpalatable that policy or its conditions might be.
In the event that a claim is made, who pays the excess will be determined on the circumstances of the event:
- which lot/s is affected; and
- what the body corporate considers to be reasonable.
In circumstances where the excess has only been applied because of the nature of the short term letting by the other lot owner, it wouldn’t seem unreasonable to me to sheet responsibility for the increase in the excess home to that lot owner.
If there is a dispute about who pays the excess, the parties could head off to the Commissioner’s Office.
I also note that the owner who short term lets is paying the difference in premiums and the brokerage fee for the new policy.
Lia De Sousa, Whitbread Insurance Brokers:
The imposed cyclone excess is standard with most insurers for properties in far North Queensland, this excess cannot be removed or reduced.
In respect to the Airbnb, the insurers will automatically impose high excess for short term letting and the yearly insurance premium will be affected, especially if 50% of the property is used for short term letting.
My question would be, is this property under a commercial policy due to the short term letting, or is it because the property is situated in Far North Queensland?
I would be more than happy to contact the insured to discuss further and to see if we could assist.
This article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice. Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 License Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website.
This post appears in Strata News #184.
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