This article discusses burglary damage and strata insurance excess, explaining whether the owners corporation or the lot owner is responsible for paying the excess after a burglary claim.
Question: If a Lot in a strata building is damaged by burglary and the OC makes an insurance claim to repair it, who pays the insurance excess? Is it the OC or the Lot Owner? This occurred in a single level shop and none of the common area was affected.
Answer: The Act allows the owners corporation to levy an excess to the owner of a lot if the claim has been caused by a culpable or willful act.
Owners Corporation and Other Acts Amendment Act 2021 (the Act) allows the owners corporation to levy an excess to the owner of a lot if the claim has been caused by a culpable or wilful act or the gross negligence of a lot owner, lot owner’s lessee or a guest of a lot owner.
The Act does not specifically speak about instances outside of the parameters set down in the act but past court decisions handed down may provide some guidance.
Case law has found the payment of an insurance excess attracts the benefit principle. It is money paid out to effect a repair, and as such consideration should be given to the person or persons who benefit. In this case, it is reasonable to suggest the lot owner is receiving the benefit because their property was damaged and requires repair.
This post appears in Strata News #563.
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.