This article discusses WA strata floorboard insurance cover removal and when the council of owners can lawfully remove this optional cover.
Question: Can the council of owners remove cover for floorboards from the strata insurance policy to reduce our premium?
In a 45 apartment strata complex in WA, our strata building insurance included cover for timber floorboards in apartments. Owners were informed that, in an effort to reduce the premium, the council of owners decided to remove floorboards from insurance cover in our renewal.
Can the COO change the insurance cover or does this decision need to be voted on at an upcoming AGM?
Answer: Legislation does not mandate the strata corporation to insure floating floors so the council of owners is entitled to remove this cover.
The committee has an obligation to insure in accordance with the legislation.
According to the Strata Titles Act 1985 (WA), and consistent across all Australian legislation, carpets and temporary floor coverings are excluded from the definition of an insurable asset. Consequently, the council of owners is not obligated to provide insurance cover for these items.
While some insurers automatically include floating floors in their policies, others offer this coverage as an optional benefit. It’s important to note that opting out of this coverage can be a more prudent approach. Often, floating floors are already covered under an owner’s contents/landlord insurance, which means paying for duplicate cover through strata insurance is unnecessary. In the event of a claim involving only the floating floor, the owner must typically claim on the strata insurance, as most contents or landlords’ policies include provisions that exclude items insured by the strata. Such claims can unnecessarily affect the strata’s claims history and lead to increased premiums.
Since the legislation does not mandate the strata corporation to insure floating floors, the council of owners is entitled to remove this cover. However, owners can still arrange their own cover through their personal contents or landlords insurance.
This post appears in the December 2024 edition of The WA 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.
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