News In Brief

Two years on – insurance repair nightmare still exists

In the wake of the anniversary of the 2011 south east Queensland floods, the state’s peak organisation for the body corporate sector says not enough has been done to prevent another insurance repair “nightmare”.

The call for more action comes after the financial ombudsman overturned hundreds of rejected insurance claims from the 2011 floods.     

According to Simon Barnard, president of Strata Community Australia (Qld) the industry was affected in many ways by the 2011 floods and the majority of the issues have still not been addressed almost two years later.

“The recently reported pay-outs ordered by the ombudsman are related to the release of water from Wivenhoe Dam, so obviously there are certain conditions which need to be met for people to be eligible to be reassessed, but we would encourage all body corporate committees to go back through any rejected claims and see if they meet the requirements,” Mr Barnard said.

“On top of that, we believe more needs to be done to improve the actual processing of insurance claims following serious disasters affecting strata communities. If we have another large scale natural disaster again, be it flood, cyclone or fire, we potentially face another insurance repair nightmare – because nothing has changed in the last two years.

“Remember back to 2011, you obviously have the emotional impact of the floods to begin with – people watching their homes being inundated and then inevitably damaged or even destroyed. But there were also a number of other issues faced by residents and owners of strata properties, particularly to do with insurance and repairs.

|”Strata property owners are in effect still unable to take out flood insurance for their individual property, so they have to rely on the body corporate committee to have sufficient flood cover.

A second issue is that the body corporate is the account holder with utility providers which leads to extended waiting periods for repairs. Utility providers require approval from the account holder which, in emergency situations, means an entire body corporate committee would need to agree to turn on telephone and electricity at a scheme, rather than one authorised person.

To ease the pressure on body corporate committees, there were provisions for interim orders with the regulator for an increase in expenditure limits, which meant strata managers could begin the process of organising repairs, however it was still restrictive – some properties faced waits of several weeks before power could be restored.

Obviously I understand that with a disaster of this size, there is a need for patience in getting services re-connected and repaired, however I would definitely support some kind of inquiry into how the process for strata communities can be improved and to prevent another potential nightmare,” he said.

Mr Barnard said one positive to come out of the floods, was that it made people more aware of the importance of understanding their insurance details.

Before the floods, many strata title owners weren’t aware that their insurance didn’t include flood cover. So the floods definitely taught people to look at the finer details of their policies.

“Although anyone would agree it was a tough lesson to learn,” Mr Barnard said today.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button