Insurance Excess

@kiwipaul said:

Even if the door was an internal door (not common property) the Strata building insurance would still cover it, but the person who damaged it would be up for the excess.

Really?  Down here in NSW an internal door is the owners’ responsibility and their home and contents insurance might cover it but the pretty sure the building insurers wouldn’t touch it.

This is what the Lands Dept/Strata Community Australia /Owners Corporation Network “Who Owns What” Memorandum says:

2.14 General – Owners responsibility
a. Built-in wardrobes or kitchen, laundry and other cupboards

… and …

h. Internal doors

Now, I know the Memorandum isn’t law and it has a few quirks but it’s a pretty clear indication of how the powers that be think.

All standard strata insurance policies should cover fixtures and fittings as long as damaged by an insurable event (accidental damage and/or impact damage to glass would be included). This would not cover carpets and curtains but may (in some cases) include floating timber floors. The bottom line is – check the policy wording. It helps if you have a reputable insurance broker who specialises in strata.

The incident in question is clearly accidental and was not in any way malicious so why would the OC not believe they should be responsible for the repair? Is there a difference between a branch accidentally blowing into a window and someone accidentally running into the window?

The way I have normally seen this be dealt with is;

1. if the damaged property is insured by the OC then claim it on the OC’s insurance (the lot owners insurance would ONLY cover items not covered by the OC’s policy and will require a letter of denial before they will pay)
2. if it is common property (such as an external door or window) then the OC is responsible for the excess.
3. if it is lot owners property such as internal cabinets, doors, sinks etc then the lot owner should be responsible for the excess.

Is this not the fairest way to deal with it?

@JimmyT said:

Now, I know the Memorandum isn’t law and it has a few quirks but it’s a pretty clear indication of how the powers that be think.

Now if we were talking about general maintenance you would be correct, but insurance is different and the memorandum is irreverent in this situation.

Here is a quote from the NSW Strata Act

81 Building
In this Part, building includes:
(a) owners’ improvements and owners’ fixtures forming part of the building other than paint, wallpaper and temporary wall, floor and ceiling coverings, and

I’m sure a lot of people are confused about this and the insurance are quite happy for them to be confused so they over insure on their contents for things already covered by the Building insurance.

@kiwipaul said:
The NSW Act dosn’t make it as clear as the QLD one does

(3) A policy of insurance taken out under this section—
(b) must provide for the reinstatement of property to its condition when new.

This is from the QLD act but I believe it is universal throughout Oz.

We have asked you many times on this website not to extrapolate Queensland law to apply to the rest of Australia.  In fact,  here you provide a very good example of how Queensland law differs from NSW law. 

Your 3b states that: A policy of insurance … must provide for the reinstatement of property to its condition when new.

In NSW the law says a damage policy is to provide for the repair of damage … so that the repaired or restored portion, is in a condition no worse or no less extensive than that portion or its condition when that portion was new.

In other words, it shouldn’t be any worse that it was before it was damaged.

This isn’t a case of the NSW law being less clear.  It simply allows for the repairs not to always return damaged property to ‘as new’ condition.

But all that is beside the point.

There is a definitive statement of what is covered by building insurances in NSW and what isn’t.

Internal doors in NSW are not covered by strata building insurance UNLESS they are either defined as common property (unlikely) or damaged by an event that comes under the general remit of Owners Corporation responsibility.  

That’s it. Enough said.  Let’s move on. 

The discussion about the Strata insurance liabilities for the different states is actually irreverent, because the Acts are only a min requirement that the insurance has to cover. The important document is the product disclosure statement (PDS) that the insurance company use to determine what is covered.

Because each state has slightly different interpretation of the Strata insurance liability in that state, the big insurance companies have decided that it is too complicate complying only with each states rules, so they have crafted a policy that is Oz wide and equals or exceeds each individual states insurance requirements.

So if you obtain a PDS from your insurer it doesn’t matter which state you are in the same PDS covers ALL states the same (except for this minor exclusion paint and wallpaper in NSW only). So my policy in QLD will cover exactly the same items as the same policy in ACT, WA, NT, and NSW.

I’ve checked the PDS of both Zurich and CHU and neither are state specific. This is obviously to simplify administration and require one help desk with one set of rules.

Why cannot the Commonwealth Gov insist on the same simplicity.

…He has contacted the managing agents several times and they have (eventually )said they will reimburse him less the insurance excess. Is this correct?…

With the caveat that my knowledge is ACT not NSW. Our standard practice had been that unit owners had to pay the excess. However, the Unit Titles Act states that insurance must cover various things but every insurer has an excess so it is not practically possible to get insurance that covers the required matters 100%. This has been interpreted to mean that the OC has to pay the excess and we are now budgeting to cover a number of claims excesses each year. If NSW has a similarly absolute statement about the items to be covered, then it seems likely to me that the OC would have to pay the excess for the same reason.