Do insurers 'police' strata schemes? | Strata Committees | Flat Chat Forum: Your Questions Answered




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Do insurers 'police' strata schemes?
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BONNIE L
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14/04/2017 - 6:51 pm
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Hi all, Thanks everyone. Does anyone have experience of a strata insurance firm acting like the Police with regular checks made to strata manager on what I regard as non-urgent maintenance matters in a building?   A comment in a SC meeting was made to this effect.  I will stand corrected if that's not tommy rot. Any tips appreciated. Disclaimer:  In my experience as a householder, no insurance firm has ever checked up on me about my car or household content insurance. It's always been up to me to check on details as routine when renewing each year. 

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Lady Penelope
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14/04/2017 - 7:14 pm
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Unlike in a residential building holding Strata Insurance is mandatory under each state’s relevant strata legislation. Perhaps your strata insurance provider was concerned that your scheme was not complying with the legislation?

In general terms, an Owners Corporation is responsible for the following main insurances :

  • The main building and any outbuildings
  • Public liability
  • Workers Compensation
  • Voluntary workers cover

More info and links to the legislation is here: http://www.strataman.com.au/insure.html

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JimmyT
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15/04/2017 - 9:15 am
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BONNIE L said
Does anyone have experience of a strata insurance firm acting like the Police with regular checks made to strata manager on what I regard as non-urgent maintenance matters in a building?   

If an insurer is aware of an issue that would substantially affect the risk in a building, and where continued coverage on the current rates may be dependent on the problem being fixed, they may check up.

However, it is much more likely that they will warn the strata scheme managers (or not) and then be prepared to not compensate the owners for any damages that occur as a result of the problem not having been addressed.

Insurers tend to be more reactive than proactive. If you breach the terms of your insurance, then they simply won't pay. There are no StrataKops.

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Cosmo
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15/04/2017 - 9:50 am
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Hi Bonnie, just to reinforce what Jimmy said.  I have never heard of an insurance company being proactvie in the way you describe.  It is very much more in their interests just to not pay out when you claim.

Our strata had a problem with balcony railings.  The railings were compliant with the relevant safety codes when built.  However since then we had some work done on the exterior which affected them and this meant we had to bring the railings up to the current code.  

Some of our owners didn't want to spend the money and just wanted to ignore the issue.  It was pointed out to them that if (and it was a small if but isn't that why you have insurance?) there was an accident the first thing the insurance company would do was send out an inspector and our claim on our insurance policy would be void.  This would have left the OC and owners liable for any claim.  

The OC has a duty to the insurance company to keep the property safe and in good repair.  If the OC or individual owners know of a defect it needs to be addressed. 

If the OC or owners couldn't have reasonably seen the defect the policy would probably cover any claim.  But as in our case we did something to the exterior which we should have known affected the railings.

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