While an owners corporation / community association is responsible for maintenance, repair and replacement of the common property, who is responsible when there is damage to a lot/apartment, from a water leak or matter relating to the complex that has damaged personal property?
An owners corporation / community association (further referenced as “Scheme”) is required to take out an insurance policy for the site. This includes amongst other things, the building structure (reinstatement / replacement), common grounds, legal liability and optional insurance such as office bearers liability, voluntary workers, fidelity guarantee amongst several other options insurances.
The insurance must cover for the replacement, repair and rebuilding of the damaged property, including improvements and fixtures, the cost of demolition and removal of debris, employment of architects/surveyors and replacement of services such as driveways and fences.
What is Not Covered by the Scheme?
As an Owner, it is important to be aware of the items that the Owners Corporation doesn’t provide cover for, including but not limited to:
- Curtains, blinds
- Dishwashers, washing machines
- Carpet and in some policies, floating floor
- Painting and wallpaper
- Televisions and entertainment systems
- Furniture, lounges, tables etc.
- Removable fixtures
- Single unit hot water systems
- Loss of rent by tenant default
- Other insurance such as Landlord Insurance and Personal content
What Insurance Should Owners Consider Taking Out?
Every resident should have a form of contents insurance to cover inside their property, and this may need to cover contents, carpets, curtains, and certain fixtures such as split system air conditioners and liability cover for third party injury within their unit.
The onus and responsibility to ensure that you have insurances in place and the correct level of cover falls back on to each lot owner. Tenants may also need to consider what level of contents insurances they take out also, in the event that there is damage caused to their contents i.e. television, entertainment systems, furniture etc.
Some insurance policies will also protect your property from accidental and deliberate damage or theft of your property by tenants as well as loss of income should a renter default on their payment.
Insurances and the correct insurance cover is one of the most important considerations that you should be aware of.
The Scheme’s insurances do not cover damage to personal property or contents, even if the cause is from the common or community property. As an example, if there is a water leak and that water leak damages your carpet or entertainment system, not only does the Scheme’s insurances not cover this, but there is also no obligations under the legislation for the Scheme to cover or take out insurances to cover any damage that is caused to personal property.
How to Make a Claim?
If the claim involves your private property and contents, you need to contact your insurance company to lodge / raise a claim.
In many instances, we have come across whereby the insurance company, will inform owners that the damage caused to private contents / personal property falls under the responsibility of the Scheme’s insurances. In many and most instances this is not the case. Our office typically has to provide communication back to the lot owner to provide the owners insurance company the items forming part of their claim, does not fall under the Schemes insurances.
If the claim involves damage / loss to common property, The 1888 Co. (as strata managers for your building) should be notified immediately.
We have a claim form that will be emailed to you to complete full details including photo’s as this will be required to be provided to the Scheme’s insurance company for review and determination.
In Closing
Insurances are critical as well as the level of cover. Each owner should consider what insurances they require to protect their property from any damages that may arise due to an insurance incident.
The information contained in this topic, is not deemed financial advice by The 1888 Co. Pty Ltd. Each owner and each Scheme should consider their needs based on recommendations as provided by your insurance professional.