whats important in the world of strata insurance

 

If this value is incorrect, it could cause issues in the event of a claim or loss.

 

It is common for owners to set this figure incorrectly, as they often use the building value of the property. The replacement cost of a building is usually greater than the building value as it is designed to consider various factors that may come into play if a loss occurs. These could include the costs of upgrading the building to current regulations after a loss, removing debris from the site so rebuilding can occur, and covering the loss of rental income incurred. To ensure all these costs are included and up to date, it is recommended that an Insurance Building Replacement Valuation be carried out by a qualified professional at least every 3 years.

The consequences of an incorrectly valued building on a Strata Policy are felt during a loss and the subsequent insurance claim. In the event of a loss, an insurance policy will typically only extend to cover up to the policy limits (not considering any subjectivities of the policy) and the owners will be on the hook for the remainder of the costs. This poses a risk directly to Strata Managers and the council members as owners could hold them directly responsible for the underinsured loss. This is a common scenario that can lead to lawsuits where building owners are seeking remuneration for the portion of the claim that goes unpaid by the insurance company.

 

The article below outlines what you must consider when setting the Building Sum Insured value.

 

Click here.

 

 

Secure Your Association’s Future with Tailored Insurance Solutions from KBI

Protect your association’s future by partnering with a specialised insurance broker, KBI. With KBI’s Association Insurance Program, you gain comprehensive coverage designed to address your association’s unique risks. Don’t leave your success to chance—contact us today to discuss your insurance needs.

 

Let KBI be your trusted partner in protecting your association’s interests and ensuring long-term resilience. Together, we can navigate the complexities of risk management and insurance and secure a brighter future for your association.

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We are a specialist insurance brokerage with an emphasis on adding value to our clients by helping them make an informed decision. Our approach combines that of an insurance broker and consultant, where we focus on providing expert advice to our clients while customising their insurance program and risk management solutions.

 

Since starting in 2013, KBI is constantly growing and becoming a leader in the Australian market. Our primary point of difference is that we don’t try to be all things to all people. We work in niche areas, where we can tailor an offering, advice and broker support to meet the specific area’s needs.

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