This article discusses strata insurance water damage coverage, explaining what repairs are covered by building insurance versus a lot owner’s contents insurance when water damage occurs inside a unit.
Question: If there is a Water Damage Incident inside a lot, what does the strata building insurance cover and what does the lot owner’s home content insurance cover?
Answer: If you pick the unit up and shake it, anything that falls out is lot owners contents as well as temporary flooring such as carpet, blinds & curtains and appliances that are not permanently attached.
In relation to property covered by strata vs contents, the basic principle is that if you pick the unit up and shake it, anything that falls out is lot owners contents as well as temporary flooring such as carpet, blinds & curtains and appliances that are not permanently attached. Other permanent fixtures including but not limited to kitchen & bathroom cabinetry are covered by strata insurance subject to the policy terms, conditions & exclusions.
In relation to cover under the strata policy, in the majority of claims there is often a component of insurance repairs and lot owner maintenance. Insurers cover the cost to repair water damage to insured property but generally exclude repairs costs related to finding and fixing the leak, as it generally considered the owners/body corporate responsibility to maintain their property and such repairs relate to excluded causes such as gradual deterioration, wear & tear or building defects.
Generally, leaks are only covered if the leak is caused from “sudden and accidental damage” such as impact damage, storm damage etc. However, the consequential water damage (to insurable property) should be covered as water damage. Long term water damage or rot may be something that the insurer does not cover depending on the circumstances as strata policies are designed to cover sudden and accidental damage.
This post appears in Strata News #541.
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.
Leave a Reply