As Strata Managers, your days are spent ensuring the needs of the Owners Corporation are met. Owners expect quick and timely action on all matters particularly when it comes to claims. However, in our experience, Strata Insurance claims that involve more than one party can result in unnecessary delays if there is a lack of clarity regarding process, and the expectations of the various parties involved.
According to Renee Cassidy, Whitbread Claims Manager, Strata Managers and unit owners generally seek the same result; the expeditious and satisfactory resolution of claims.
However, there are times when their priorities misalign; this is when delays and issues can occur.
Recently a Strata Manager asked us whether they had the authority to sign a release in regards to a claim for a property that they manage.
In this instance, the damage occurred within an individual unit, as well as in the common area. The insurance assessor calculated the settlement based on both components combined and prepared a release to incorporate all costs. The unit owner refused to sign the release as he was disputing the settlement figure for his component.
This meant that the claim for both areas was delayed until the unit owner could resolve his issues in regards to the settlement.
Claim specialist Ms Cassidy advised, “If the Strata Manager had signed the release and therefore accepted the claim settlement on behalf of the owner, they may have prejudiced the recourse available to the owner. The Strata Manager could also have exposed themselves to a claim being made against them by the owner for agreeing to an unsatisfactory settlement.”
On this occasion, Whitbread were able to negotiate with the assessor to issue separate releases for the individual unit and common areas.
This ensured that partial settlement could be issued to the Owners Corporation, while the unit owner disputed the settlement relating specifically to his unit.
As an aside, if a claim were to be made against a Strata Manager, the Strata Manager should notify their insurance broker of a potential professional indemnity claim.
How can you avoid this issue with owners and keep the claim on track for everyone?
- Ensure all involved parties are clear on the claim components.
- Discuss the unit owner’s claim settlement amount and expectations.
- Be aware of who will have the authority to sign off the release for each component.
Ms Cassidy said, “The most efficient process is to ensure that all parties are satisfied with the proposed settlement figure before signing a release, and to identify if separate releases are required for each of the damaged areas involved. If this is done in the beginning, unnecessary delays can be avoided, which is a great outcome for you, the Strata Manager, as well as the unit owners.”
Read our complete checklist on how to lodge a claim.
For more advice on the claims lodgement process, or to speak to one of our claims consultants, 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.
