Excess(es) in Strata Building Defect Claims

After 14 years the NSW Court of Appeal finally helps NSW strata owners in HOW insurance claims.

Since the introduction of Home Owners Warranty insurance in NSW in 1997, the private insurers have consistently said that when a strata corporation makes a claim for common property it's effectively doing so for all the owners.  So it's not one claim but multiple claims and (guess what?) the strata corporation has to pay multiple excesses.  At $500 per excess that's $10,000 in a 20 lot strata corporation and $100,000 for a 200 lot strata corporation.

I've always argued against that position with mixed success.

Now in its decision in Vero Insurance Limited v Owners of Strata Plan No 69352 & Ors on 30 June 2011 the NSW Court of Appeal has confirmed that an strata corporation can make a HOW insurance claim in its own right (and not for the lot owners), that it's only one claim and that only one excess applies.

So, finally strata owners in NSW have legal support for the correct position and HOW insurers have to stop deducting significant amounts for strata claims.

I hate to think how much money strata owners have been cheated out of over the last 14 years by the insurers insistence on multiple excesses.  But think about it this way ... even if there were only a 100 strata building claims per year of blocks with 20 lots, that's over 28,000 excesses ($14 million) instead of just 1,400 excesses ($700,000).  And, the reality is that the numbers and amounts are probably a lot higher.

Now, I wonder if any of those strata schemes can claim the excesses back now.  Is anyone interested in trying?  If so, contact me here.


Francesco ...