Residential Strata Insurance: 6 Common Claims and how to avoid them
From storms, floods, break-ins and legal disputes, we’ve settled thousands of claims over the years - and we’ve also seen how some of them might have been avoided. Here are the most common Residential Strata insurance claims we see every day, and some tips on how you can help to avoid them in your building.
Leaks and water damage
From CHU’s internal data, nearly 45% of residential strata claims^ lodged are the result of water damage. Whether it’s a burst pipe, overflowing water or even roof damage - if it’s not managed in time, it could lead to a large claim.
Gradual deterioration and/or Wear & Tear should be rectified by maintenance. The source of leaks can be hard to detect, so getting some help to do so can be valuable. Modern technology enables pipe location/leak detection with minimal exploratory destruction.
Here’s some of the common places you should be checking in your property for signs of water damage or a potential flooding risk:
Check the warranty expiry date on the collar of flexi hoses and that they are intact on all personal and communal appliances which are plumbed in, like washing machine, dishwasher and water filter
Clean and maintain roof and gutters for damaged tiles, obstructions or blockages
Investigate any reports of water pressure changing or an increase in water charges, could be a leak behind the walls or with the garden reticulation
Inspect walls and ceilings for blistering, water marks or stains
Don’t walk away when filling the bath or sink
Turn off the water when leaving your residence for a longer period of time
Storms, floods and weather events
Although Australia is famous for its great weather - we know that it can actually be very turbulent, and sometimes extreme. From CHU’s internal data, natural events including storms make up for around 25% ^ of residential claims each year. Make sure your building is storm-ready by:
Keeping contents and appliances out of areas that are at risk of flooding
Clearing gutters and balconies regularly, so rainwater can drain
Trim back trees and branches
Prepare your residents for storms, by informing them of what to do when there’s a storm approaching. Tune into local weather reports and check in on your neighbours and tenants that they are safe and prepared. If your property is hit by severe weather, the number one priority is to make sure everyone is safe and informed.
Accidental damage claims can be some of the most frustrating, because they often could have been easily avoided.
Ensure communal areas are kept well maintained, clean and tidy, and that common traffic areas are clear of obstructions to prevent an incident.
Check before you dig in the garden to prevent damage and disruption to reticulation or infrastructure networks (Dial before you dig www.1100.com.au)
Use professional tradespersons for maintenance and/or installations.
Not the most common claim, but Legal Liability can be the most expensive. It covers you when you’re legally responsible to pay compensation if an incident has occurred.
This could include covering the legal and indemnity costs for:
Accidental damage to someone's personal property in common areas - including tradespersons
Injury or death caused by negligence, and any loss of earnings due to injury
Wrongful acts by an Office Bearer (e.g. the Chairperson, Secretary or Treasurer of the committee) for a breach of duty or clerical mistake
The best way to help avoid a legal liability claim is to stay vigilant. Keep an eye out for any potential safety hazards, take all reasonable action to minimise a risk as soon as possible and report any potential concerns to the Body Corporate.
If a fire starts in your building it can spread fast and the damage can quickly become a total loss.
As well as having fire safety equipment fitted, get your appliances serviced regularly and act quickly if someone reports an issue with wiring or power outlets. Consider installing an RCD (residual current device) for additional protection that ordinary fuses and circuit-breakers cannot provide.
Here are some of the most common sources of residential fires to be aware of:
Faulty wiring or old appliances causing electrical/mechanical fires, such as air conditioning units or dryers
Lint filters on washing machines and dryers that are not cleaned
Kitchen fires caused by fryers, overheating pans and hotplates
Candles and incense burners left unattended
Cigarette related fires - indoors and on terraces and balconies
Theft, vandalism and malicious damage
Items in the common areas like BBQs, gardening tools and gym equipment may be an attractive target for burglars. Often it can be easier to gain access to these areas than resident’s homes, and they can blend in around the building under the guise of a tradesperson or new resident. As well as replacing any stolen items, you might also have to claim for broken windows and doors or new locks if the intruders have forced their way into the building. So sometimes a small break-in could result in a much larger insurance claim. Here’s a few easy actions you and your residents can take to help prevent a break-in or theft in the building:
Introduce yourself - get familiar with your neighbours and tenants so you’ll recognise anyone out of place
Don’t be afraid to question unfamiliar people entering the property
Consider adding smart locks to shared areas like garages, terraces and gyms
Don’t leave doors propped open - especially during deliveries or removals
Wait for the shared garage door to be closed before exiting the driveway
Increase your security by adding intercoms, motion lights or security cameras - although pricey, it is a good investment and might assist in a lower premium
Find out more about CHU Residential Strata Insurance Plan We know that there’s always going to be some unavoidable accidents or damage, especially in a shared property. But because we’re experts in residential strata insurance, we can help to tailor your policy, so you’re confident that you have the right cover for your building. More information >
^ Estimate based on CHU Assess claims
CHU Underwriting Agencies Pty Ltd (ABN 18 001 580 070, AFS Licence No: 243261) acts under a binding authority as agent of the insurer QBE Insurance (Australia) Limited (ABN 78 003 191 035, AFS Licence No: 239545). Terms, conditions, limits and exclusions apply to the products referred to above. Any advice in this article is general advice only and has been prepared without taking into account your objectives, financial situation or needs. Before making a decision to acquire any product(s) or to continue to hold any product we recommend that you consider whether it is appropriate for your circumstances and read the relevant Product Disclosure Statement which can be viewed on this website or obtained by contacting CHU directly.
This article was brought to you by CHU