A strata insurance claim involves more people than most claims: the owners corporation, the committee, the strata manager, one or more lot owners, sometimes tenants and their own insurers, and an assessor appointed by the insurer. When everyone knows their role, claims move. When they do not, repairs stall while people argue about who should have called whom. This guide explains how the process typically works under a building policy. For the covers themselves, see our strata insurance page.
A note on terms: the legal entity that holds the policy is called an owners corporation in some states, a body corporate in Queensland and other names elsewhere. Our guide to body corporate insurance in Queensland covers that state’s terminology. The process below is broadly the same, but the rules behind it vary by state, so check the current requirements where your scheme is located.
Who Lodges a Strata Insurance Claim
The building policy belongs to the owners corporation, so claims under it are lodged by or on behalf of the owners corporation, usually through the strata manager or the committee. A lot owner generally cannot lodge directly on the building policy. Instead, they report the damage to the strata manager, who decides with the committee whether a claim is made.
Lot owners’ own policies are separate. A contents or landlord claim is lodged by the lot owner with their own insurer, and a tenant’s belongings are a matter for the tenant’s own contents policy.
The First Day or Two
- Stop the source. Turn off the water, isolate the power or secure the opening.
- Make safe. Emergency work to prevent further damage is generally expected, but check with the strata manager before anything beyond that.
- Photograph everything before cleaning up, including the cause if it can be seen.
- Report in writing to the strata manager, with the date, what happened and which lots are affected.
- Keep damaged items until the assessor says they can go.
Who Pays the Excess
Every claim under the building policy carries an excess. The insurer deducts it or asks for it; who inside the scheme actually bears it is a separate question.
Some schemes pay the excess from the owners corporation’s funds. Others, where their by-laws or resolutions allow, pass it on to the lot owner whose lot was the source of the damage or who benefits from the repair. What a scheme can do here depends on the state, the by-laws and the circumstances, so ask the strata manager which approach applies and check current requirements before assuming. Our explainer on how an insurance excess works covers the mechanics.
Watch for separate excesses. Some policies apply a higher excess to water damage, or to lots with a history of repeat claims.
Water Damage: The Claim Committees Know Well
Burst flexible hoses, leaking showers, failed balcony membranes and blocked stormwater all turn up regularly in strata claims. Three distinctions decide how these claims go.
- The cause versus the damage. Policies typically respond to the resulting damage from a sudden escape of water, not to repairing the failed pipe, tap or membrane itself. Some policies include an allowance for finding the leak; others do not.
- Sudden versus gradual. A shower that has leaked slowly for months, or grout that has failed through age, usually falls under maintenance and wear exclusions. Sudden events are treated differently from gradual deterioration.
- Common property versus lot property. Who owns a pipe that serves one lot, or a balcony membrane, is set by the strata plan and the rules in your state. That boundary affects who pays for repairs outside the claim.
Repeat leaks from the same source are a renewal issue as well as a claims issue. Fixing the cause matters as much as fixing the damage.
Building Versus Contents
The building policy insures the building: common property and, depending on the state and the plan, fixtures within lots such as kitchens, bathrooms, internal walls and sometimes fixed floor coverings. Lot owners insure their own contents: furniture, personal belongings and, in some cases, floor coverings, curtains and improvements they have made. Our page on residential strata insurance sets out how the building side is usually structured.
Owner improvements are a common grey area. A renovated kitchen or new flooring may or may not fall within the building policy’s definition. Tell the strata manager about significant improvements so the sum insured reflects them, or insure them separately.
Some building policies include a limited allowance for alternative accommodation or lost rent where a lot cannot be lived in after insured damage. Landlords should not rely on this alone; tenant default and wider rent losses are landlord policy territory.
The Strata Manager’s Role
The strata manager usually lodges the claim, liaises with the insurer and assessor, arranges make-safe work, and reports to the committee. Their authority comes from the agency agreement and whatever the committee has delegated, so larger decisions, such as accepting a settlement or disputing a decline, generally go back to the committee.
Your broker can support the process by explaining the wording, following up with the insurer and helping the committee when a claim is disputed. Our article on what an insurance broker does during a claim explains that role, and how the claims process works covers the general steps.
Records Worth Keeping
- Maintenance records for plumbing, roofs, balconies and waterproofing.
- A claims log showing dates, lots, causes and outcomes.
- Committee minutes recording decisions about excesses and repairs.
- Plumber and builder reports that identify causes.
- Current valuation reports and the policy schedule.
- Contact details for every lot owner and, where relevant, their agent.
Good records shorten claims, support the committee in disputes and give the insurer confidence at renewal. Our strata insurance page explains how we place and review building cover for schemes.
Common Questions
Can I claim on the strata policy for damage inside my unit?
Possibly, for damage to building elements such as walls, ceilings and fixtures, depending on the wording and how your state defines the building. Your own belongings sit with your contents policy. Report it to the strata manager first.
Why am I being asked to pay the excess?
Some schemes pass the excess to the lot where the damage started, or which benefits from the repair, where their by-laws or resolutions allow it. Ask the strata manager which decision applies to your claim.
Will a claim increase our premium?
Claims history is one of the factors insurers consider at renewal, particularly repeat water damage. Fixing the cause and keeping good records both help.
Talk It Through
Request a strata quote or call 1300 983 940 and we will review your scheme’s cover, excesses and claims arrangements with the committee.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.