WA: Does a small strata scheme need machinery breakdown insurance?

This article discusses small strata machinery breakdown insurance cover and when it may be needed for shared equipment like gates and garage doors.

Question: We are a four lot strata scheme with minimal machinery or equipment. Should we include cover for machinery breakdown in the residential strata insurance?

We are a small four lot strata group located over two storeys, i.e. two units on the ground floor and two on the first floor.

The development does not have a lift, gym, swimming pool, etc. Each unit has a garage with a garage door, reverse cycle ducted air conditioning and water heater. A common property electronic main gate gives access to the units in the development. The strata company does not own any other significant machinery or equipment.

Should we include cover for machinery breakdown in the residential strata insurance?

Answer: We generally recommend considering machinery breakdown insurance if you possess machinery items.

We generally recommend considering machinery breakdown insurance if you possess machinery items, which can encompass a wide range of equipment, including but not limited to pumps (including pool pumps), electric garage doors, elevators, central air-conditioning units, and various other machinery or electrical equipment.

In most instances, strata insurance policies provide fusion cover for motors with a power rating under 5kw. You need to refer to your specific strata policy wording and assess the motor sizes of equipment such as gates, garage doors, and ducted air conditioners to ascertain if they are eligible for the limited fusion cover.

If any of the motors powering these devices exceed the 5kw threshold or broader breakdown cover is required beyond fusion, machinery breakdown insurance should be considered.

This post appears in Strata News #674.

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.