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Accidents happen, and when they do many of us turn to our insurance policies to help cover the repairs.

This article looks at making a claim through strata insurance for an individual lot, from what’s covered, to what you need to do to speed up the claim process.

Body corporate levies are essential to the operation of a body corporate. A body corporate is not a business, and is entirely self-funded by the lot owners in the scheme.

Levies are the mechanism for owners within a body corporate to pool their money, and to pay for shared expenses. All owners within a body corporate have entered into a binding legal agreement to pay levies on time. If an owner does not pay their levy contributions on-time, the other owners all have to pay more to fill the gap.

This is like a group of friends going out for dinner, and splitting the bill. If one friend refuses to pay or can’t afford their meal, the other friends will have to put in additional money to pay the restaurant bill. That is not fair on the friends who came prepared to pay for their own share of the food, and the friend who didn’t pay now owes money to the rest of the group.

Importantly, there is zero ‘profit margin’ on levies. If the body corporate has to pay a $10,000 invoice, it needs to bring in $10,000 from owners based on their entitlements. On-time levy payments from owners are critical to keep a body corporate operating. If an owner falls behind, the entire cashflow of the body corporate is interrupted.

What’s covered under strata insurance?

While strata insurance may seem to cover many of the things a normal house and contents policy does, it operates quite differently.

Strata insurance is a specialised insurance product which covers properties within the one building (apartments) or separate buildings (townhouses), in one body corporate, as well as common property like roads, gates and amenities.

Of course, what’s included under each policy will depend on the body corporate, the insurer providing the cover, and the specific inclusions and exclusions on each policy. Subject to this disclaimer, strata insurance generally covers the following:

  • The building structure including roof, gutters, walls, doors, ceilings, windows, and other structural elements
  • Elevators, escalators, gates, roller doors & car stackers
  • Common area facilities (pool, spa, gym, sauna, toilets etc.)
  • Fences
  • Pergolas
  • Built-in cupboards, wardrobes etc
  • Satellite dishes
  • Signs
  • Sinks
  • Balcony railings
  • Kitchen cabinetry
  • Bathroom cabinetry
  • Ovens & cooktops
  • Shower screens

For a more comprehensive guide to what’s covered under strata insurance, check out our recent article ‘What’s covered under a strata insurance policy’.

What is an insurance cause, and an insurance rectification notice?

Property damage claims need to have an established cause. For example, water-damaged kitchen cabinets caused by a burst pipe, or building damage caused by a wind-fallen tree.

Before considering your claim, the insurer will ask for proof that whatever caused the damage has been fixed. They will not even consider fixing your ceiling if the roof leak has not been repaired, mitigating the chance of a repeat claim.

In most cases, the insurer will only consider paying a claim relating to the damage resulting from the cause.

If the cause of the issue was a maintenance failure – for example, a leaking roof was caused by cracked roof tiles, the owner will generally need to fix the roof tiles at their expense, and the insurer will consider the damage resulting from the roof leak as the claim – so the ceiling and internal walls.

Keep this in mind when submitting an insurance claim. You must demonstrate that the cause has been addressed and is not likely to re-occur.

Contacting the body corporate committee

Notify the body corporate committee about the potential claim as soon as possible. Provide them with a detailed description of the damage, along with supporting documentation including photos or videos. The committee may advise on specific steps to take and guide you through the process of filing a claim.

It is also important that the cause of the potential insurance claim is first rectified, as an insurance claim cannot be lodged or proceed otherwise. Proof of causation rectification is also required with a report and payment of an invoice is usually sufficient.

Who arranges the quotes for repair?

To complete an insurance claim form you must source quotes to repair the damage.

For damage to an individual lot, the owner must arrange repair quotes and contracts. This is the case even if the body corporate insurer will make a financial contribution to that claim. It is strongly recommended that you always engage suitably qualified and insured contractor sot quote and undertake any repairs.

For damage to the common property or common areas, the committee or building manager/caretaker must arrange the quotes for repair.

Complete the insurance claim form

If eligible, owners can lodge a claim under the body corporate’s insurance policy. At BCsystems, this is all conveniently managed online via our online forms portal.

When completing your claim form, make sure you:

  • Obtain and provide specific quotes to fix any damage
  • Report any crime, including malicious damage, to the Queensland Police Service as soon as possible and obtain a report number
  • Take clear photos of any damage, including of the surrounding area

If a person is responsible for the damage, obtain their contact information and submit this with your claim. If possible, photograph their identification.

If a vehicle is involved, record its registration number, make, model, year, body shape, and colour.

Submitting the claim

BCsystems will submit the claim to the body corporate’s insurance provider on your behalf. 

The body corporate will be informed of any excess amounts you have to cover or pay in relation to your claim.

If all the relevant information has been provided, straightforward claims are usually processed quickly by the insurance company.

More complex or high-value claims mean the insurance company will usually appoint an assessor or loss-adjuster to review the claim. This is to determine whether the claim falls withing the policy terms and conditions, and where it does, whether the right trades and service providers to reinstate, repair or replace the damaged property as soon as possible have been sourced.

Approval and settlement

Once the claim is approved, the insurance provider will proceed with the settlement process. This may involve direct payments to contractors or reimbursement for expenses incurred.

Work closely with the body corporate committee to oversee the repair or replacement process, ensuring it stays within any of the scheme’s relevant by-laws.

If necessary, keep all stakeholders, including other residents and property owners, informed about the progress of the insurance claim and the steps being taken to address the damage.

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