Strata Insurance Claims

Stratarama Strata Insurance Claims

Strata insurance claims are on the rise annually across the industry based on a variety of reasons. Naturally as the industry total of claims rises, so too does the total costs of claims paid.

In order to minimize costs of claims and the number of claims themselves, Owners and Strata Corporations are best placed when they are aware of the most common insurance claims, how to prevent them, and maintain the common spaces for the community.

Let’s take a look at some of the types of different insurance claims that lot owners, tenants, and corporations need to be aware of. Not only will this help in figuring out what the most common insurance claims are, but also how to prevent them through adequate maintenance from both the owners of the lots and Body Corporate.

The Most Common Insurance Claims

As a strata owner, figuring these types of claims and what to look out for beforehand ensures that you are well-equipped with what you have to deal with. Here are some of the most common insurance claims that Strata and Community Strata Titles Members lodge.

1. Weather And Natural Damage: South Australia is known to be susceptible to some harsh weather,  particularly in certain areas. This is under no one’s control, yet there is a multitude of insurance claims based on damage of property through weather and storm events or fire events.
2. Fire Damage: Another common insurance claim that prevails in strata is fire damage. Damage caused by fire can be one of the most costly. These can be caused both naturally or from various other reasons, including arson or simple accidents caused by a Resident in the living spaces of a unit, issues with heaters, candles, stovetops, and wiring can all create an unwanted spark, which can in some cases cause extreme damage not only to that unit but which may spread to others. There are so many possibilities that can result in a small or large fire.
3. Accidental Damage: Accidental damage that occurs on the common property or inside a Strata unit is frequent and as suggested, are accidental, however sometimes some preventative actions can minimise the risk of such accidents taking place.
4. Water Damage: Water damage is the most common type of strata insurance claim. These take over 40% of the total strata insurance claims as people regularly deal with a multitude of water-related issues. These are either caused by unexpected leaks and bursts in pipes, roof leaks water retention, and water seepage. Sometimes water-related claims could have been mitigated where the Strata / Community Corporation or individual unit owner had undertaken regular preventative maintenance. Water damage can be extremely difficult to trace the source of damage as water runs.

These are some of the most common insurance claims that people make though far from the only claims. Due to the sheer number of people living in a complex of units, flats, apartments, or other dwellings with common property, as you may imagine, the risk of a claim is significant.

How To Limit/Prevent Them With Proper Maintenance

The best solution to ensure that claims are limited is by regular maintenance. More often than not, insurance claims are created because of a form of resultant damage. If proper steps are considered when it comes to the maintenance of strata residences, then it will become easier for both the corporation and the lot owners. Here are a few things that can be considered when it comes to maintenance.

• Frequent Checks On Water Damage

This goes for both strata corporations and the lot owners. Since water damage is a major issue, it is best to ensure that both parties are doing their best to minimise the damage. By keeping checks on possible leaks, water levels, stains, and formation of moulds to try and avoid excessive water damage.

• Adequate Prevention For Weather Changes 

Weather changes are in no one’s control, but the group can look at what these weather changes can cause by way of hazard – i.e Doe the surrounding trees drop a lot of leaf matter in the gutters that need cleaning before wet weather seasons? If living in a fire-prone area, what actions should you take to limit seasonal fire damage? Is the group’s stormwater system able to cope with the seasonal deluge?

• Availability Of Fire Extinguishers And Devices

To minimize the damage created by Fire, there must be adequate measures in places such as fire extinguishers, smoke detectors, fire alarms, and other similar items that are regularly maintained to assure effectiveness. Some of these requirements may be legislated, others may simply be additional actions you can take to not only limit damages caused but to assist in ensuring the safety of all residents. What is the best practice as opposed to what is the minimum requirement?

• Security Placements

There’s a risk of security as well; break and enter damages or malicious damage and vandalism. Smart locks can aid in making sure that unknown people remain away from the entry to common property areas. Individual owners can ensure their current locks are operational. Residents to make sure that alarm codes and keys are looked after privately and not given out. Are the window screens secure, common gates locked, and/ or operational.

Water Damage Claims

Water damage claims – There’s a high number of these claims. Often water damage may not appear straight away and maybe as a result of a slow leak which is causing ongoing and unnoticed damage. Damage could be behind cupboards or inside walls. Tracing these claims can also be costly as the Contractors need to find the source of the water to prevent it from continuing to cause damage. Some Residents also overlook small leaks until the issue is largely visible by which time the damage is far greater and the costs associated with the claim have risen exponentially.

It is important to remember that paying insurance is not an alternative to maintenance both preventative and routine. Insurance will not protect the group for damages caused by wear and tear and in fact, claims could be rejected on the basis that the group had not maintained the property which would be of further cost to the Strata or individual unit owner.

Other Types Of Insurance Claims

The group will find that outside of building cover there are other covers required to be held, which are in place to protect and assist the group in the event of claims of other natures such as –

Public Liability, Fidelity Guarantee, Office Bearers cover & more.

In all instances, the group is prepared, and considering in advance, how the Strata can protect themselves from such claims being made is the best policy. For example, ensuring adequate lighting and there are no tripping hazards on-site to prevent possible claims being lodged against the Corporation’s public/ legal liability covers.

It’s your Community. 

This article and the information provided represents general advice and does not take into account any specific financial situations, objectives, or needs of an individual or Body Corporate/ Strata Corporation. Before you make any decision about whether to acquire a certain product, you should read the relevant product disclosure statement, policy wording and/or consult your Insurer

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from
https://www.stratarama.com.au/strata-insurance-claims/

Water Issues In Strata Buildings

Stratarama Water Issues In Strata Buildings

Strata buildings are complex. There are common and individual wiring and pipes throughout the structure of the building. And as with everything, the more you have of anything, the greater the chance of something going wrong. Who pays for the water damages? Is it the lot owners or strata, what types of water damages are there?

Types Of Water Issues

When it comes to the type of water damages that can occur in strata buildings, there’s a long list. The possibility of leaks is extremely common. The possibility of seepage throughout the building that can further damage more elements in the structure. Here are the most common water-related damages that occur in strata buildings:

• Leakages of plumbing, taps, or pipes
• Seepage from cracks in the foundation
• Mould, rot, or corrosion from seepage
• Ruptured water pipes
• Roof flashing, tiles, and shingles and rusted roof sheets in need of repairs (including gutter and downpipe leaks and blockages)

With varied pipelines running within the structure often in between walls and underground, it can be difficult to inspect and trace for some leaks (unlike others where the leak may be as a result of saying a washer or toilet seal). In some instances the inspection necessary may require more than just a Plumber, you may require an Engineers or Leak detection specialist or other professional to get to the sources of leaks and bursts in the structure of the buildings.

Maintenance Needs Vs Insurance Claims For Water Issues

When it comes to water issues, there’s no answer that fits all questions. In some instances, water damage may be as a direct result of neglect in relation to maintenance by lot owners or the strata collective. Other times a pipe may burst for no expected cause, and cause damage which is not visible for some time. Insurance has a part to play where appropriate, but it is not in place as a means of replacing routine maintenance.

With a clear indication that there is a leak coming from common property, the strata must get it fixed as soon as possible to prevent and limit any damages that water may cause. The same is said for a Unit Owner.  However, this does not mean that lot owners can wait for small leaks to turn into major issues. It is best to take responsibility as soon as possible to prevent the bigger loss, bigger insurance, or maintenance costs. Preventative maintenance is always best where possible. Both the strata and the unit Owners must ensure that they are doing their best to maintain the building and private property.

Therefore, if there is a visible leak, proper maintenance must be carried out at the right time. Insurance claims can only be of assistance in certain circumstances and only once the cause of the water damage issue has been resolved. Moreover, insurance claims are not entertained when there are obvious signs of lack of maintenance on the lot owners or tenants’ side.

Insurance claims are covered mainly where there are sudden accidents or bursts. If leakages or moulds are growing over time, then it is upon the lot owner to get it checked out by a professional beforehand.

How Water Issues Affect Buildings

Water issues can cause immense damage to the structure of the buildings. If there are prolonged issues that lot owners or strata have overlooked, then there will be issues for those living within the buildings.

Proper maintenance is essential to ensure that the living conditions of the buildings are not obstructed. Water issues can severely affect the conditions of different spaces throughout the buildings. If they are not paid attention to, then these might result in excessive repairs and the inability to use homes for owners or tenants.

Walls, ceilings, and roofs might need to be removed and repaired. This is a long process.

The Effect On Future Insurance Premiums And Excesses 

Water issues create the majority result of insurance claims and the number of water-related claims continues to rise year on year. As claims histories grow the policy holder (the strata) faces the likely possibility of increased future insurance premiums and excesses or specific excesses imposed on water damage claims in order for the insurer to be able to offer a policy.

The best solution for water issues is that strata and lot owners actively put in balanced efforts to resolve issues when evident and work to undertake any form of preventative maintenance required. With better maintenance at both ends, the group can hope to be less heavily impacted not only by insurance claims and premiums but also by emergency works and repairs.

Tony Johnson of Stratarama chats with Imparta Engineers about Water Issues / Causes / Damaged to Body Corporates

 It’s your Community. 

This article and the information provided represents general advice and does not take into account any specific financial situations, objectives, or needs of an individual or Body Corporate/ Strata Corporation. Before you make any decision about whether to acquire a certain product, you should read the relevant product disclosure statement, policy wording, and/or consult your Insurer.

The post Water Issues In Strata Buildings appeared first on Stratarama

from
https://www.stratarama.com.au/water-issues-in-strata-buildings/