This article discusses the strata insurance valuation dispute process and why obtaining a proper valuation helps address owner concerns.
Question: A lot owner is challenging our strata insurance valuation as being too high
One of the owners in our group is challenging our current valuation as being too high. He believes properties here in WA haven’t risen in value for several years.
Our insurance broker obtained quotes from a range of insurers and we (the council of owners of a self-managed strata group) believe we have obtained a good deal. It would cost more to get a full valuation than if we just paid the extra suggested in the current valuation. This would be around $60/unit/year. Is this a fair response to this owner?
Answer: Ensure you’ve demonstrated that you’ve done your due diligence.
As a strata Corporation, the best way to overcome any challenge by an owner around whether you’re doing the right thing is to ensure that you’ve demonstrating that you’ve done your due diligence.
A strata Corporation should have a valuation done for the building, which would be the basis on which you insure the building for. If you’ve got a valuation, and an owner is challenging the valuation, what I would want to know as a committee member is ‘Where are your workings and who have you consulted that has a higher level of qualification?’ then ‘Who has the committee consulted?’, So that’s the first question I’d want to know.
If there’s no valuation, I think it would be a fair and reasonable thing to get a valuation done. For a property with 12 lots, I’ve seen valuations, through companies like Leary & partners. They come in at around the $500 to $700 mark. If you don’t have a valuation, do your due diligence and get one done.
This post appears in the May 2021 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.