Question: Can we fine the manager for forgetting to arrange our insurance renewal? The mistake cost us a 285% increase in premiums.
After handling the insurance renewal for seven years, our owners corporation manager forgot to renew our building insurance and the policy lapsed. The manager says the previous insurance company won’t take us back, and the new quotes have increased by 285%. We have little option but to take what cover we can get since we’re currently uninsured.
Can the committee seek compensation from the owner’s corporation manager, such as a fine, or can we report them for their costly error?
Answer: If the strata manager was acting as an authorised representative of a broker or insurer, there might be avenues to address concerns by referring a complaint to the Australian Financial Complaints Authority.
Tyrone Shandiman, Strata Insurance Solutions:
Many insurers prefer not to provide quotes after the due date, citing various reasons. This poses a challenge however there are a few things I would suggest.
Firstly, have the strata manager provide a detailed list of insurers approached and the reasons for the declines.
In my professional opinion, the lapse in cover and a substantial increase in premiums merits a second opinion. Consulting another broker could provide valuable insights and potentially uncover alternative solutions. This approach ensures that the best interests of the owners corporation have been considered.
If the strata manager was acting as an authorised representative of a broker or insurer, there might be avenues to address concerns by referring a complaint to the Australian Financial Complaints Authority. I would suggest seeking advice on this when you speak with an alternate broker.
Callum Wilson, The Strata Shepard:
It is unlikely that the OC Manager would receive a fine. Unfortunately, the legislation in Victoria is often toothless when it comes to holding OC Managers accountable for their actions.
If they are a member of the Strata Community Association (SCA – the industry body for strata managers), you could make a complaint to SCA, and the manager would likely receive disciplinary action. Whilst this is unlikely to produce any compensation for your OC, it may help prevent issues in the future.
If your OC wants compensation, the best options would be via contract negotiation or to change to a different management company. It’d be best to engage a strata expert to ensure your OC gets the best possible return.
This post appears in the March 2024 edition of The VIC Strata Magazine.
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.
Callum Wilson The Strata Shepherd E: info@thestratashepherd.com.au P: 0431 925 908