Question: Our insurance policy includes mechanical breakdown insurance. Can I claim the replacement of my reverse cycle air conditioner under mechanical breakdown?
I own a townhouse in an owners corporation. When reading the building insurance policy, I note we have mechanical breakdown insurance.
Does this type of insurance cover the reverse cycle air conditioners in each of our townhouses?
My reverse cycle air conditioner recently broke down. It can’t be repaired and needs replacing. A new air conditioner will cost $3k, including supply and installation. Would this be covered under the mechanical breakdown insurance if I agree to pay the excess?
Answer: It depends on the reason for the breakdown.
As the property is not in Queensland, the air conditioner is considered part of the building under the strata insurance.
Does the machinery breakdown section of the policy cover your air conditioner? It depends on the reason for the breakdown.
As an example, the CHU policy wording does not cover the below causes under machinery breakdown:
Wear and tear or the wearing away or wasting of material caused by or naturally resulting from atmospheric conditions, rust, erosion, corrosion, oxidation or ordinary use.
The breakdown policy is not designed to cover items that have broken down simply because the air conditioner has reached the end of its life and needs replacing. Maintenance is an obligation of the owner.
In addition to cover under the machinery breakdown section of the policy also extends to provide cover in the property section for events not associated with a “breakdown”, for example, fire.
If you have a claim, we recommend you obtain a report indicating the cause of the breakdown. If it is not due to wear and tear or other maintenance exclusions, submit the claim to your strata insurer for consideration.
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.
This post appears in the April 2023 edition of The VIC Strata Magazine.