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What could turn your world upside down?

Updated: Jan 30

Fires, floods, and other natural disasters that devastate homes and communities are constantly in our news it seems.

BCB is on the frontline to help when such disasters strike. Every year, we advocate and help thousands of strata schemes get the best outcome possible when they make a claim.

But in a strata community, we’ve seen there are many other types of sudden and unexpected events that could turn residents’ worlds upside down.

The tale of the exploding car

BCB recently managed a claim where a car exploded underneath a strata property and the ensuing blaze resulted in extensive fire and smoke damage. The smoke and soot made their way into most of the units and electrical equipment, which required extensive sanitisation.

The heat of the fire melted plumbing and damaged electrical, sewerage and water supplies. It required significant testing of electrical equipment before any replacement or repairs could be carried out.

BCB and the insurer acted quickly. On the day the event occurred, a loss adjuster was on site to organise make-safe works and alternative accommodation. Without electricity and

sewerage supply, all residents had to vacate the premises.

The inner workings of a large and complex claim

  • Multiple third-party involvement – incidents of this scale require many different experts and the list for this claim was extensive – Structural Engineers, Certifiers, Restorers, Loss Adjusters, Builders, and an Electrical/HVAC Engineer, to name a few. The building also needed external security as it was vulnerable in its vacant state. This was a cost covered by insurance.

  • Structural stability – the day after the incident, a structural engineer installed 12 x 10-tonne acro props to the car park entrance to prevent the building from collapsing. An X-ray was also taken of the car park slab to establish if there was any heat-related failure. The burning vehicle had been moved to the driveway by the fire officers, so it was affected by the heat and needed replacing.

  • Business continuity – the loss adjuster organised temporary power and lighting, and installed two amenities blocks so the commercial occupants could keep their businesses running.

  • Plumbing replacement – underground stormwater pipes were also tested by pipe-fed cameras and along with the visible plumbing, it too was found to have melted from the heat.

  • Extensive cleanup – the melted sewerage pipes required a toxic sewerage cleanup and restoration involving a hygienist and microbial testing.

Upside down world of the residents

The 13 commercial occupants were reliant on restoration as soon as possible for their livelihoods. Strata insurance doesn’t cover costs to run their business, such as loss of income, wages or stock losses which is claimable under the occupants’ Business Interruption insurance. However, the owners did receive loss of rent or temporary accommodation benefits.

Because the soot and smoke had infiltrated the entire building, no restoration works could begin until all the occupants had removed their contents and personal belongings. It was quickly apparent this situation would become worse before it got better, as each new day uncovered new issues.

A mounting financial impact

Total reserve: over $5.5m.

Payout to date: over $4.7m.

Across the 39 units in the strata scheme, on top of the repair/restoration costs, their insurance policy paid for the following additional benefits.

Temporary Accommodation

Loss of Rent

Storage and Removal of lot owner’s contents

Levy Contributions

Security costs

Their insurance also covered additional ‘’hidden’’ costs that insurers absorb during a large and complex claim. In this case, these included things like the cost of a loss adjuster, an engineer’s report, building consultants, hygienists, and electrical and soil testing.

Insurance claims – where the rubber hits the road

BCB attended the initial site meeting to answer customers’ questions, and our file continues to grow from over 450 actions so far, including emails, phone calls, enquiries, payments, lot owner responses and providing updates to the scheme together with the loss adjuster and insurer. And the claim is still ongoing.

A claim of this nature illustrates how important it is to not only have the right amount of cover but also the value of additional policy benefits, outside the standard rebuild costs.

Whilst we might think all strata properties are similar, each has its own characteristics that require specialist help to understand just what the risks are and what cover is most appropriate.

Ensuring your scheme has adequate sums insured to rebuild the property, plus sufficient cover for loss of rent, temporary accommodation and other costs, is vital to how well and how fast your scheme recovers from having its world turned upside, and the emotional and financial shocks involved.

If you have any questions about your level of cover, or you’re unsure what additional benefits you have included, please get in touch. Help is right here.

Photo taken on the day of the fire.

Image source: Emersons Australia

The information provided is general. It does not constitute legal advice and should not be relied upon as legal advice. BCB recommends seeking advice from a qualified lawyer on any legal issues affecting you before acting on any legal matter. Whilst BCB endeavours to ensure the content of this information sheet is accurate, it does not represent or warrant its accuracy, adequacy or completeness and is not responsible for any loss suffered as a result of or in relation to the use of this information.

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This article was brought to you by BCB.


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