Q: Another strata management considers that:
“all owners have the right to make claims on the buildings insurance”!
“the insurance policy covers claims on all owners fixtures and improvements”.
S/M quotes Sect 161 part 3 of the Strata Schemes Managements Act 2015 – Parts of building to be covered (a) owners’ improvements and owners’ fixtures forming part of the building.
The strata manager supports one owner (of 2 lots) to make direct claims which the SC does not see and the OC pays the “excess” – that is how we found out (Areas have included windows that are within the lot parcel as opposed to on external boundary of that lot). That ruling is not applied as the insurance company “accepts the claim”.
So far it is only one individual who does this.
Should not the strata manager be in control?
The premium for the building will be impacted as well as the claims history which is not readily available to members of the SC, let alone the OC!
This matter (insurance claims by an owner directly to insurer) is coming up for consideration by SC next week. I would be very grateful for your advice!
A: Owners corporation’s general insurance cover is mandatory for the building, common property and personal property of the owners corporation.
The building’s structure, such as fixed plant, machinery, services, and owners’ fixtures, fittings and improvements which form part of the structure of the building such as shared sewage pipes, electrical wiring, internal fixed flooring, external windows form part of the policy (internal windows as part of the building’s structure are also likely to be insured).
See in particular subsection (4) below –
161 Requirements for damage policy
…
(3) Parts of building to be covered The parts of a building to be covered by a damage policy include the following:
(a) owners’ improvements and owners’ fixtures forming part of the building,
(b) a building consisting entirely of common property,
(c) anything prescribed by the regulations as forming part of a building for the purposes of this section.
(4) Parts of building not required to be covered The following parts of a building are not required to be covered by a damage policy:
(a) fixtures removable by a tenant at the expiration of a tenancy,
(b) owners’ improvements and fixtures comprising paint, wallpaper and temporary wall, floor and ceiling coverings,
(c) anything prescribed by the regulations as not forming part of a building for the purposes of this section.
For individual owners, they have an insurable interest in the owners corporation’s building policy but a separate contents insurance should be taken out for items such as furniture, moveable appliances, light fittings, carpets, lights and blinds. As for payment of the excess, the owners corporation pays for the policy and therefore should meet the excess under its own insurance (even though we see your point that you consider the items to be an individual’s personal property).
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Please note that this article is provided for information purposes only and is not a substitute for professional legal advice.