Strata property insurance encompasses a complex web of legal obligations and procedures essential for safeguarding and administering strata buildings. This article delves into the insurance mandates outlined in the Strata Schemes Management Act 2015, walks through the steps for submitting claims when property damage occurs, and provides insights on efficiently managing insurance claims in a strata setting. By elucidating the roles and responsibilities tied to strata property insurance, we aim to enhance your understanding of how to effectively navigate these requirements.
Strata Insurance Essentials: Understanding Your Insurance Cover
The Strata Schemes Management Act 2015 (SSMA), particularly Section 60, requires Owners Corporations to secure comprehensive damage insurance for their strata schemes. This policy must provide adequate coverage for rebuilding or repairing the property in case of destruction or damage, ensuring that any reconstructed or replaced parts match the original quality and scope.
Key insurance obligations for Owners Corporations include:
- Reinstatement and Replacement Insurance: Covers rebuilding costs for common property buildings damaged by events like fires.
- Public Liability Insurance: Mandatory coverage of at least $10 million for common property, protecting against damage and injury claims.
Personal Property Coverage
Contents within individual lots are not covered by the Owners Corporation’s policy. Owners and tenants should obtain separate contents insurance for personal belongings such as furniture and appliances.
Landlord Protection
While not legally required, landlord insurance is often necessary for those renting out strata properties. It typically covers:
- Landlord-owned contents (fixtures and fittings)
- Risks like tenant-caused damage or theft
- Legal expenses and liability claims
- Loss of rental income
This specialised insurance addresses risks not covered by standard contents policies, particularly those related to tenant activities.
How to Make a Claim for Property Damage in Strata Buildings
When property damage occurs in a strata setting, it’s essential to understand the insurance coverage, claim process, and responsibility for excess payments. Here’s a concise guide:
Insurance Coverage Overview
Strata insurance policies typically cover a range of incidents, focusing on exclusions rather than specific inclusions. Common claims include:
- Damage from impact, storms, accidents, malicious acts, fire, and water
- Less frequent claims like flood damage, post-cadaver removal cleanup, and repairs after emergency services entry
Contents or landlord insurance coverage depends on individual policies.
Filing a Claim
Once you’ve confirmed the damage is covered:
- Private Property/Contents: Contact your insurance company or broker directly
- Common Property: Inform your strata manager, who will contact the insurer and coordinate repairs
General claim procedure:
- Provide detailed incident information to the strata manager
- Ensure access for tradespeople to conduct repairs
- Take steps to prevent further damage
- Report any criminal activity to the police
- Preserve the damage site for assessment, making only necessary temporary repairs
Insurance Excess Responsibility
Who pays the excess depends on various factors:
- Individual-Caused Damage: The person responsible for the damage typically pays the excess, whether for private or common property
- External Event Damage:
- Single lot: The lot owner usually covers the excess
- Multiple lots: The body corporate may take responsibility
- Building/Maintenance Failure: The party responsible for maintaining the failed component generally pays the excess (e.g., body corporate for common property, individual owners for private property)
Understanding these guidelines helps navigate the complexities of strata insurance claims efficiently.
Effective Strategies for Successful Residential Strata Insurance Claims
To streamline the residential strata insurance claims process, consider these key tips:
Proactive Preparation
- Appropriate Coverage: Choose strata insurance that matches your property’s needs and regularly update it to reflect value changes.
- Policy Awareness: Ensure all body corporate members understand the policy’s coverage and risk levels.
- Comprehensive Records: Maintain detailed documentation, including receipts, invoices, certificates, and maintenance logs. Store duplicates off-site or in the cloud.
- Visual Documentation: Keep current photos of all areas under body corporate responsibility, highlighting potential issues.
Prompt and Thorough Communication
Initiate contact with your insurer as soon as possible to enable proper assessment and solution finding. Keep affected parties informed and encourage collaboration among stakeholders.
Damage Control and Documentation
Take immediate action to prevent further damage or danger, following insurer guidelines. Document all emergency repairs thoroughly, including contractor reports and photos when safe.
Avoid Claim Oversights
Include often-overlooked details in your claim form:
- Insurance policy number and property address
- Strata plan number, GST information, and ABN (if applicable)
- Contact information for strata manager or body corporate representative
- Detailed account of the incident (date, time, description, cause)
- Emergency repair quotes and invoices
- Pre-repair damage photos
- Police report numbers for relevant incidents
- Bank details for claim payments
By following these guidelines, you can enhance the efficiency of your strata insurance claim process, reducing stress and ensuring timely resolution and compensation.
Conclusion
Strata insurance plays a vital role in protecting communal and individual investments from unexpected damages. A thorough understanding of your policy coverage, the claims process, and your responsibilities is crucial for effectively managing insurance matters. By staying informed and prepared, you can navigate the complexities of strata insurance with confidence, ensuring prompt and fair resolution of claims when they arise. For professional guidance on strata insurance issues, consider consulting with a specialised strata lawyer who can provide expert advice tailored to your specific situation.
