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’s the most common Residential Strata insurance claims we see everyday, and some tips on how you can help to avoid them in your building.
Leaks and water damage
From CHU’s internal data, more than 40% 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 spotted in time, it could lead to a large claim.
Here’s some of the common places you should be checking in your property for signs of water damage or a potential flooding risk:
● Roofs and gutters for damaged tiles or blockages
● Communal appliances which are plumbed in, like washing machines
● If there’s a cold spell, check in on empty units - in case of a burst flexi hose
● Investigate any reports of water pressure changing
● Inspect walls and ceilings for water marks or stains
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
If your property is hit by severe weather, the number one priority is to make sure everyone is safe and informed. Tune into local weather reports and check in on your neighbours and tenants that they are safe and prepared.
Accidental damage claims can be some of the most frustrating, because they often could have been easily avoided. Sometimes it’s as simple as making sure stairwells and communal areas are clean and tidy, reducing the risk of any slip or trip hazards.
Keep and eye out for a worn or damaged carpets and tiles, as well as making sure all communal appliances are in working order and they have clear instructions for use.
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 of 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 risks for someone to get injured, and report any suspicious behaviour to the Body Corporate.
If a fire starts in your building it can spread fast and the damage can quickly become total. 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. This might even save lives, as well as your insurance premium.
Here are some of the most common sources of residential fires to be aware of:
● Faulty wiring causing mechanical fires from air conditioning units or dryers
● Electrical fires from old or faulty communal appliances
● Candles and incense burners left unattended
● Kitchen fires caused by fryers, overheating pans and hotplates
● 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 might actually be a more 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 workman or new tenant.
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
● 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
● Don’t leave doors propped open - especially during deliveries or removals
● Consider adding smart locks to shared areas like garages, terraces and gyms
● Increase your security by adding intercoms, motion lights or security cameras - although pricey, it might help lower your premium in the long run
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 insurance, we can help to tailor your policy, so you’re confident that you have the right cover for your building - we’ve got your back.
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.