If you are preparing to undertake renovations on your home you need to be aware that renovating a strata property may have a few more complexities to it than your average free standing dwelling.
Whitbread Strata Insurance expert Lia de Sousa dishes out her best advice to ensure your insurance is not compromised when performing renovations to your property.
Golden rule number 1: Inform the right people that you are carrying out renovations
Advise your Strata Manager, Insurance Broker and Contents Insurer of the works being performed, prior to commencing.
Key information you need to share:
• Summarised description of works
• Contract value / amount
• Anticipated start & completion dates
• If at any time the Essential Services need to be turned off, you must inform your Strata Manager
Why your insurer needs to know:
When signing an insurance contract it is considered your duty to disclose to the insurer every matter that you know, or could reasonably be expected to know, about your renovations. This is relevant to the insurer’s decision on whether to continue to accept the risk, and if so, on what terms. Basically, you need to inform the insurer when your property conditions change.
Failure to notify could impact how your insurance company would respond to any possible claim under your current Strata Insurance or Contents Insurance policy if any damage occurs as a result of your renovation.
Take this scenario for example…
As a part of your renovations, you are replacing the roof on your property. The roof replacement works will mean that your premises is left uncovered for three days. With everything going on during the renovations, you understandably forget to advise your Strata Insurer of the nature of works taking place.
Over the three days in which your roof was left uncovered, a large storm came through causing severe damage to the building. As you neglected to notify the insurer of the roof replacement, the insurance company denied the claim based on the fact that the damage caused was directly related to the renovations.
Had the insurer been advised prior to works being carried out, they may have decided to impose a higher excess for the duration of repairs, or informed you of this specific policy exclusion before you chose to commence works.
Golden rule number 2: Make sure your contractor has current insurance – and the right insurance!
Before commencing works, confirm that the Contractor has a current Contract Works and Public Liability Insurance policy.
Simply getting a “Yes I do!” from the contractor is not acceptable. You must ask the Contractor to provide you with a Certificate of Currency, which they can obtain from their insurer.
If a Contractor or his employees were to cause, or were alleged to have caused property damage or personal injury whilst carrying out work on the Owners Corporation property, this could result in a claim being brought against the Contractors, the Owners Corporation, and the individual lot owners.
A common assumption is that contractors, and/or tradespeople are covered under the liability section of the Strata Insurance policy; however they are not. They must have their own Public Liability Insurance, in their own name.
Our recommendation is simple. Prior to commencing renovations, don’t hire or engage anyone who doesn’t carry a current Contract Works policy or a current Public Liability policy, and ensure you hold their current Certificate of Currency on file.
Golden rule number 3: After your renovations are complete – obtain a property valuation
Your renovations may significantly affect the value of the apartment / lot.
Once the renovations to your home within the Owners Corporation are complete, we suggest taking the following two steps:
1. Refer to your lot liability under the Plan of Subdivision to ensure that your lot liability incorporates these renovations.
2. Contact Whitbread Insurance Brokers to discuss and arrange additional Building Insurance for your specific lot.
Please note:
The additional Building Insurance cover is arranged and paid for by the individual lot owners.
If you would like to obtain further professional advice on the do’s and don’ts of insurance when renovating your property, please contact Whitbread Insurance Brokers on 1300 424 627.
This insight article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice. Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website.
