Strata Insurance Claims Process

37140 — Strata Insurance Claims Process

Strata & Body Corporate Insurance (37100)

Overview

Node 37140 addresses the process by which an owners corporation or lot owner notifies, progresses, and resolves a claim under a strata scheme’s insurance policy. Claims affecting common property or the building itself are generally managed by the owners corporation, typically through its strata manager, while claims relating to a lot owner’s individual contents or improvements are managed separately by the lot owner under their own policy.

The claims process for common property matters typically begins with formal notification to the insurer, followed by assessment of the loss, determination of any applicable excess, and coordination of approved repairs. Where a claim originates from a specific lot — for example a burst pipe within a unit affecting common property — scheme by-laws often address how any excess is allocated between the owners corporation and the responsible lot owner. Disputes over a claim decision may be pursued through internal insurer review and, where unresolved, external dispute resolution.

This node is intended for owners corporations, strata managers, lot owners, and insurers engaged in the strata insurance claims process, applying the general framework addressed in node 37100 to the claims handling context specifically.

Scope & Boundaries

This node addresses the process by which strata insurance claims are notified, progressed, and resolved. It does not address the substantive cover provided under the scheme’s building insurance, addressed in node 37110, common property and liability cover, addressed in node 37120, or lot owner insurance obligations, addressed in node 37130.

Scope Note

This node describes the general strata insurance claims process as at the time of writing. The specific claims procedure and excess allocation applicable to a given scheme should be confirmed against the scheme’s policy document and registered by-laws.

Key Concepts

Claim Notification

The initial step of formally advising the relevant insurer of a loss event, generally undertaken by the strata manager on the owners corporation’s behalf for common property or building claims.

Excess

The amount payable by the owners corporation or lot owner before insurance cover responds, with the allocation of excess between parties often addressed in scheme by-laws where a claim originates from a specific lot.

Repair Coordination

The process by which an owners corporation, typically through its strata manager, coordinates approved repairs following a successful common property or building claim.

Insurance Dispute Resolution

The process available to a lot owner or owners corporation to challenge a claim decision, including internal insurer review and, where unresolved, external dispute resolution mechanisms.

Regulatory & Legal Framework

Strata Schemes Management Act (state-based, for example the Strata Schemes Management Act 2015 (NSW) and equivalent legislation in other states)

Relevant state strata regulator

Sets procedural requirements for claims affecting common property.
Insurance Contracts Act 1984 (Cth)

Australian Securities and Investments Commission

Governs the insurer’s claims handling obligations and timeframes.
Australian Financial Complaints Authority scheme

ASIC-approved external dispute resolution body

Provides a pathway for resolving unresolved insurance claim disputes.

Practical Application

Scenario	Application	Outcome
A storm damages a strata building’s roof	The strata manager notifies the insurer and coordinates the claim on behalf of the owners corporation	The common property claim progresses through the scheme’s designated process
A lot owner disputes the excess allocated to them following a claim originating in their lot	The matter is addressed by reference to the scheme’s by-laws on excess allocation	Responsibility for the excess is resolved according to the scheme’s rules
An owners corporation disagrees with an insurer’s claim decision	The owners corporation pursues internal review and, if unresolved, external dispute resolution via the Australian Financial Complaints Authority	The dispute is progressed through the available resolution pathway

Cross-Series References

37100

Strata & Body Corporate Insurance

General framework for strata and body corporate insurance, applied here to the claims handling context specifically.

Findings are presented on the basis of data and evidence alone.