1. The
Best
Prac<ce
for
Strata
Insurance
and
Claims
Handling
Webinar,
4
August
2011
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

2. Imagine
‘ratemystratalaws.com’
%
80
70
Strata
Insurance
60
50
40
30
20
10
0
ACT
QLD
NSW
VIC
Compara<ve
study
of
key
features
of
strata
insurance
legisla<on
-­‐
TEYS
Lawyers
May
2011
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

3. Features
of
effec<ve
insurance
schemes
Responsibility
Func<onality
Clarity
Equity
Transparency
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

4. Developers’
responsibili<es
Legisla(ve
Provision
ACT
QLD
NSW
VIC
Developer
effects
insurances
upon
establishment




Developer
tables
policies
at
first
AGM




©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

5. ‘Clear
agreements
make
for
good
friends’
Legisla(ve
Provision
ACT
QLD
NSW
VIC
Public
liability
insurance
for
strata
managers




Public
liability
insurance
for
OC’s




Building
insurance
–
full
replacement
as
new




Debris
removal
and
advisers
fees
must
be
covered




Defines
what
lot
owners
property
is
not
covered




Insurance
policies
include
workers
compensa<on




Insuring
with
excess
is
permissible




©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

6. Measures
for
improving
transparency
Legisla(ve
Provision
ACT
QLD
NSW
VIC
Insurance
details
disclosed
on
pre-­‐purchase
cer<ficate




Insurance,
policies,
minutes,
receipts
disclosed
on




inspec<ng
records
Annual
general
mee<ng
papers
disclose
insurance




arrangements
Strata
roll
discloses
insurance
par<culars




©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

7. Members
equity
is
important
Legisla(ve
Provision
ACT
QLD
NSW
VIC
Premium
contribu<ons
adjustable
for
different
fit-­‐out




and
use
Owners
must
no<fy
of
improvements




Clear
rules
for
determining
who
pays
excess
(if
any)




Owners
must
no<fy
change
of
use
effec<ng
premium




©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

8. Enhancing
ongoing
func<onality
Legisla(ve
Provision
ACT
QLD
NSW
VIC
Government
approved
insurers




Best
available
policies
sa<sfy
legal
requirements




Opt-­‐in
voluntary
schemes
for
stand
alone
buildings




Reinstatement
process
conducted
under
court
order




Building
replacement
valua<on
obtained
at
least
each
5




years
Owners
protected
individually
from
suit
by
insurers




©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

9. The
devil
is
always
in
the
detail
Current
Strata
Law
–
Building
Insurance
Typical
Strata
Policy
Insure
for
as
new
replacement
value
As
new
replacement
value
less
excess
Insure
all
buildings
• Buildings
exclude
retaining
walls
damaged
by
storm
or
rain
• Building
damage
caused
by
lack
of
maintenance
• Buildings
damaged
by
non-­‐rec<fica<on
of
defects
Insure
all
site
improvements
Landscaping
excluded
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

10. More
devil,
more
detail
Current
Strata
Law
–
Public
Liability
Typical
Strata
Policy
$10M
public
liability
insurance
$10M
less
excess
All
events
on
common
property
• Excludes
injury
or
damage
caused
by
animals
on
common
property
• Excludes
loss
from
construc<on,
altera<ons
or
addi<ons
in
excess
of
$500K
without
wrihen
consent
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

11. A
word
on
excesses
Policies
with
an
excess
are
in
breach
of
strata
laws
except
Qld
which
are
absolute
as
to
required
cover
save
for
Qld
• If
common
property
causes
lot
property
damage,
the
OC
must
pay
the
excess
• If
lot
property
causes
damage,
the
OC
must
s<ll
pay
the
excess
because
of
breach
of
absolute
duty
to
insure
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

12. Solu<ons
for
this
insurance
dilemma
Government
insurance
Qualify
insurance
scheme
requirements
(QLD
model)
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

13. How
it
usually
happens
Lot
owner
loss
OC
insurer
Lot
owner
claim
made
unsa<sfied
OC
insurer
Lot
owner
says
‘no’
bears
loss
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

14. How
it
some<mes
happens
Lot
owner
Lot
owner
pays
Lot
owner
loss
par<ally
excess
sa<sfied
OC
insurer
Lot
owner
claim
made
insurer
pays
Lot
owner
OC
insurer
says
claims
on
own
‘no’
policy
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

15. How
it
should
happen
Lot
owner
loss
Insurer
OC
insurer
Lot
owner
rejects
claim
claim
made
sa<sfied
OC
pays
lot
Insurer
OC
pays
owner
accepts
claim
excess
sa<sfied
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

16. Self
help
for
all
unit
owners
Legisla(ve
Shortcomings
Owners
Corpora(on
Ac(on
No
compulsory
cover
for
debris
removal
Take
out
cover
(rou<nely
done)
and
advisers
fees
No
defini<on
of
lot
owner’s
contents
not
Advise
owners
of
excluded
lot
owner’s
covered
contents
from
policy
wording
No
AGM
disclosure
of
insurance
Voluntarily
disclose
insurance
arrangements
arrangements
at
each
AGM
No
compulsory
replacement
valua<on
Voluntarily
obtain
a
replacement
required
at
least
each
5
years
valua<on
at
least
each
5
years
and
insure
accordingly
No
requirement
for
no<fica<on
of
owners
Amend
by-­‐laws
to
require
no<ce
improvements
and
change
of
use
No
rules
for
determining
who
pays
excess
Amend
by-­‐laws
to
include
rules
(bluff?)
No
disclosure
of
insurance
on
register
Voluntarily
disclose
details
on
register
No
requirement
to
include
workers
comp
Take
out
cover
(rou<nely
done)
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

17. Where
the
government
must
help
Legisla(ve
Shortcomings
Law
Reform
Ac(on
Required
cover
not
available
Relax
requirements
or
provide
government
insurance
No
requirement
for
developers
to
effect
Clarify
developers’
obliga<ons
insurances
upon
establishment
of
OC
No
recogni<on
of
excesses
Permit
excesses
or
provide
government
insurance
No
opt-­‐in
voluntary
scheme
for
stand
Create
opt-­‐in
scheme
alone
buildings
No
government
approved
insurers
Approved
insurers
No
owner
protec<on
from
subroga<on
Protect
owners
from
subroga<on
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

18. Join
our
next
webinar
Join
us
for
our
next
webinar
at
4.00pm
on
1
September
2011
‘Who’s
Responsible
For
These
Defects
And
How
Do
I
Get
Them
To
Pay?’
Reserve
your
seat
now
at:
hhps://www3.gotomee<ng.com/
register/127376206
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au

19. About
the
presenter
Michael
Teys
is
the
Founder
and
Principal
Lawyer
of
TEYS
Lawyers.
He
has
a
Bachelor
of
Laws
and
prac<ces
exclusively
in
the
area
of
strata
<tle
law.
He
is
a
Fellow
of
the
Australian
College
of
Community
Associa<on
Lawyers.
He
was
formerly
an
Adjunct
Lecturer
with
Charles
Sturt
University.
He
appears
weekly
on
SKY
News
Business
Channel's
Property
Success
with
Margaret
Lomas
and
is
a
regular
panellist
for
the
property
edi<on
of
Your
Money,
Your
Call
for
the
same
channel.
You
can
find
out
more
about
Michael
at
www.michaelteys.com
TEYS
Lawyers
prac<ce
na<onally
in
strata
<tle
law
represen<ng
owners
corpora<ons,
bodies
corporate
and
apartment
owners.
The
firm’s
prac<ce
groups
include
building
defects,
management
rights,
strata
community
disputes,
by-­‐laws
and
rules
and
levy
and
fee
collec<on.
Subscribe
for
their
free
e-­‐newsleher
StrataSpace
and
find
out
more
about
them
at
www.teyslawyers.com.au
©
Copyright
2011
Teys
Lawyers
www.teyslawyers.com.au