400. Can an owner force their building to make an insurance claim?

4 Responses

1. Very relevant talk about insurance claims. We have a similar case where lot owner’s apartment was trashed by the tenants, no common property involved, the lot owner without letting strata committee know, got strata manager to make a claim on the policy, it was approved to do works worth of $13K (excess = $10K) Then, the owner requested $13K in lieu of works, claiming he will do works himself quicker, and pocketed the money.
   When the committee knew about it, the committee resolved to rescind the claim and get the owner to reimburse all $13K. Two consecutive General Meetings confirmed that the owner must reimburse $13K.
   Now he is in NCAT…
   But my question is about a “singularity” in such scenarios.
   Suppose damage has been $9,999 (just under excess). Then the insurer would not accept a claim as it would have been below excess.
   But once damage becomes say $10,001 (just above the excess), then all of a sudden that owner has grounds to claim.
   In a way it entices the owners to grab a mallet to deliberately increase the damage above excess and get a free renovation at strata cost.
   Something must be done to close such loophole.

   Reply

2. My understanding is that whilst the OC are the policy owner that owners are a Third Party Beneficiary as defined in Section 48 of the Insurance Contracts Act. Therefore Owners have the ability to lodge a claim under the policy.

   Due to the OC and Strata manager being difficult in a previous unit that I had water ingress in, I referenced Section 48 of the Insurance Act to enable me to make a claim. I was successful in lodging the claim and all repairs were carried out by the Insurances preferred builder.

   Interested to get your thoughts on this Amanda. I’m now wondering if I was just lucky that the claim proceeded with me making the claim.

   http://classic.austlii.edu.au/au/legis/cth/consol_act/ica1984220/s48.html

   Reply

   1. Hi Anthony,

      For the benefit of all of our members, we do ask that questions be posted in the QandA Forum so that Amanda can answer there and everyone can learn.

      If you’re not sure how to post in the Forum, please let me know and I will be able to provide detailed instructions for you.

      I look forward to seeing you in the Forum soon.

      Regards,
      Romina – YSP Team

      Reply

   2. Hello Anthony,
      Could you please confirm/clarify that:
      (1) you made the claim and not that you asked strata manager to lodge a claim;
      (2) which party and how paid excess ( I assume strata paid excess);
      (3) what would happen if strata refused to pay excess?
      Regards, Alex

      Reply