Australian (ASX) Stock Market Forum

Insurance

Joined
9 June 2011
Posts
1,926
Reaction score
479
This one came up last night at dinner - completely flawed me.

Background:

I live in a 4th story apartment which I own. It's a nice area. I don't own home and contents insurance because I figure if someone is able to get through the foyer security door, up 3 flights of stairs, through my door and rob me then so be it. Also, I just don't have that many valuable things. Don't get me wrong, if my dishwasher floods and ruins my carpet, its a pretty big hit, or if someone steals everything I own, all my fiancee's clothes etc, it hurts us but in my view we just don't own enough to justify the insurance costs given our situation. A 20k tail risk isnt that big of a deal.

Fast forward to last night and my friend was saying that we should get home and contents insurance because of the slight possibility of complete risk or ruin. He said that if my washing machine floods, and floods the next 3 levels below us, then the insurance company comes after us and it could be a pretty serious whack. Structural dmaage and we are broke. Or if my oven somehow blows up and lights the entire complex on fire, then once again the insurance company comes after us, and they take everything. Tail risk in the millions.

Is this correct? I have insurance through my strata (obviously) which I assume covered these massive tail risk scenarios but perhaps I'm wrong? If some random occurrence leaves me liable for hundreds upon hundreds of thousands of dollars (dryer blowing up, destroying the building, bath flooding the entire complex, etc etc then surely i need to get some insurance which covers that!??!?!
 
Joined
20 August 2014
Posts
17
Reaction score
2
I'm not sure of the answer, but what I would do is contact the strata manager and or the insurance company who your strata uses. It should have the name of the company and policy number on the annual report/ docs you get from the strata manager. Might also be worthwhile contacting a home and contents type insurance company to see what they suggest, keeping in mind the will obviously be trying to sell you something! Let me know how you go as I also live in a strata development and are curious as to the answer. Good luck!
 

pixel

DIY Trader
Joined
3 February 2010
Posts
5,359
Reaction score
331
I am the treasurer of a (self-managed) Strata Company; so I should be interested as well...
Our insurance has just come up for renewal, and this is our situation:

Our entire complex is covered by Building Insurance, but each resident is responsible for insuring (or not) any contents. We also had a recent case where a unit owner had neglected the maintenance; subsequent water damage was confined to their own property, but - probably quite predictably - the Insurer refused cover on the grounds that it could have been prevented. The owner was left several $'000 out of pocket. So I guess it would have been the same, only worse, had other units be damaged as well.

The scenario may differ slightly from the OP's question where the flooding or explosion is supposed to be caused by an accident or malfunctioning equipment. I still believe that would be covered by the Building Insurance - but you better read the fine print. (I will now too.)
I am, however, pretty certain that your Contents Insurance would NOT come into play for consequential structural damage. Had you violated any legal obligation, e.g. failed to have an RCD switch installed that could have prevented a fire, the Insurance Company may sue you in a Civil Court to recoup their losses; but I'm not aware of a Contents Insurance that would cover your risk of being sued.
 
Joined
9 June 2011
Posts
1,926
Reaction score
479
I'm still looking into this and will report back when I know more. Spoke with several insurers this morning and I believe the situation I'm referring to is 'legal liability'. Have emailed the strata manager though so will know more later in the week
 

tech/a

No Ordinary Duck
Joined
14 October 2004
Posts
20,014
Reaction score
5,121
Just get it covered
Reward to risk is way out of whack.
 
Joined
2 June 2011
Posts
5,341
Reaction score
233
I'm still looking into this and will report back when I know more. Spoke with several insurers this morning and I believe the situation I'm referring to is 'legal liability'. Have emailed the strata manager though so will know more later in the week

I have a house. My policy has $20m legal liability for building and contents. Seems pretty standard, like when you get comprehensive car insurance. NB: My coverage would not apply in your hypothetical washing machine scenario if I did not have contents insurance. You can kind of think of the building insurance being one policy. and contents being another separate policy, each with legal liability insurance.

It does have this exclusion clause though (which doesn't apply to me so I never looked into it)...

What is not covered?

...

Any claim for legal liability arising from an incident occurring on the premises where the premises is a Strata Title building and a body corporate is responsible for taking out building insurance that would cover such an incident.
 
Joined
9 June 2011
Posts
1,926
Reaction score
479
Just get it covered
Reward to risk is way out of whack.

This will be the end result, just learning as I go.

I have a house. My policy has $20m legal liability for building and contents. Seems pretty standard, like when you get comprehensive car insurance. NB: My coverage would not apply in your hypothetical washing machine scenario if I did not have contents insurance. You can kind of think of the building insurance being one policy. and contents being another separate policy, each with legal liability insurance.

It does have this exclusion clause though (which doesn't apply to me so I never looked into it)...

I read that exclusion cause as pretty standard, just a way of saying 'if building insurance within strata should cover this and for some reason you haven't paid your strata, then we aren't providing coverage.'
 
Joined
20 April 2009
Posts
8
Reaction score
2
GET COVERED, SOME VISITOR GETS HURT YOU COULD BE SUED MILLIONS, WE HAVE RENTALS, ONLY CARPETS, CURTAINS AND FIXTURES ARE OURS, TENANTS OWN THEIR FURNITURE BUT WE PAY FOR CONTENTS INSURANCE JUST FOR THE PUBLIC
LIABILITY.
sorry, caps lock was on.
Ray
 
Joined
2 June 2011
Posts
5,341
Reaction score
233
I read that exclusion cause as pretty standard, just a way of saying 'if building insurance within strata should cover this and for some reason you haven't paid your strata, then we aren't providing coverage.'

I read it as if the strata is responsible for insuring against this loss but doesn't have adequate insurance it doesn't become our problem.
 
Joined
9 June 2011
Posts
1,926
Reaction score
479
I read it as if the strata is responsible for insuring against this loss but doesn't have adequate insurance it doesn't become our problem.

Could possibly be that to. In my case I'd be staggered if that's the case, its a good building with a good committee and I can't believe we'd be 'skimping' on insurance. Obviously need to check the fine print.
 
Joined
30 June 2008
Posts
11,671
Reaction score
3,953
The Miami condo collapse is a disaster. The whole 12 story. 137 apartment building is effectively worthless and hundreds of people are dead, injured or still missing.

So I wonder what the insurance situation will be regarding the collapse ? Will apartment owners receive insurance payouts ? What about deaths and injuries ?

At this stage no one knows exactly why the building just collapsed. However the ABC has an excellent initial discussion. Perhaps the really concerning part of the issue is that there are scores of similar condos up and down the Surfside coastal beachfront.

So what is their status now ?

 
Joined
30 June 2008
Posts
11,671
Reaction score
3,953
The Miami condo collapse is a disaster. The whole 12 story. 137 apartment building is effectively worthless and hundreds of people are dead, injured or still missing.

So I wonder what the insurance situation will be regarding the collapse ? Will apartment owners receive insurance payouts ? What about deaths and injuries ?

At this stage no one knows exactly why the building just collapsed. However the ABC has an excellent initial discussion. Perhaps the really concerning part of the issue is that there are scores of similar condos up and down the Surfside coastal beachfront.

So what is their status now ?


The reasons for the sudden catastrophic collapse of this condo are starting to emerge. Not surprisingly Miami officials are calling for inspections of all older condos over 6 stories within the next 45 days. (I wonder if there enough engineers around to actually do that ? )

What is concerning however is evidence that earlier engineers warnings about the state of the collapsed condo had been ignored in 2018.
But again I wonder what the impact of this will be on the insurance industry and condo owners who think they have a valuable asset.

 
Joined
30 June 2008
Posts
11,671
Reaction score
3,953
Issues around Insurers shoddy builders and cyclone damage.

Insurer cops judicial wrath

by Resolve editor Kate Tilley


An insurer has been found to have exhibited “less than the utmost good faith” in a dispute with the body corporate of a Queensland apartment complex that was badly damaged by Cyclone Debbie in 2017.

 
Joined
30 June 2008
Posts
11,671
Reaction score
3,953
The collapse of the Miami Condo last week has been a catastrophe. As result the local authorities immediately announced that they were reviewing every older apartment block to check for any structural problems with foundations.

They have already declared one apartment block as unsafe and ordered everyone to vacate. Be interesting know how many they have checked to date.

It does turn out however that the building had already been inspected by engineers who had filed report with the local authorities back in January this year noting the structural problems. Interestingly enough there has been ongoing conflict with the insurance company over repairs to storm damage


The mayor of Miami-Dade County had suggested an audit of buildings 40 and older to make sure they are in compliance with the local recertification process after the condo building collapse last week that killed at least 22 people and left more than 120 still missing.

After reviewing files, the city Building and Zoning Department sent a notification that the Crestview building was not in compliance. On Friday, the building manager submitted a January recertification report in which an engineer hired by the condo association board found the property unsafe. The city then ordered all residents to evacuate immediately.
 
Joined
30 June 2008
Posts
11,671
Reaction score
3,953
Came across an excellent analysis of why/how the Champlain building collapsed.

Great one for the engineers:)
 
Joined
30 June 2008
Posts
11,671
Reaction score
3,953
The Insurance costs of the record floods across Europe are starting to be assessed. It is certainly going to have an impact on insurance costs across the world.

The insurance and reinsurance industry is expecting losses in the billions of Euros as a result of catastrophic flooding across parts of Europe, with the event poised to become one of the costliest flood episodes on record.

...Considering this flood event is ongoing, it remains too early to predict economic and insured loss levels, but it looks very likely that the impact to the industry, once all damage is accounted for, will reach into the billions of Euros.
As a result, it’s understood that global insurers and reinsurers are preparing for one of the costliest flooding events on record.


 
Top