Prevention is better than cure as the saying goes. 

After attending a number of industry events where insurance premiums and the steps that Owners Corporations can take within their control to reduce the impact of claims were discussed, we sought consent from BAC Insurance Brokers to include a link from CHU Underwriting Agencies, one of Australia’s largest strata insurance specialists, to assist our owners in this regard.

When insurers assess strata buildings, they consider the claims history and loss ratio of the scheme. A building with frequent claims is viewed as higher risk, which can lead to higher premiums, increased excesses, or exclusions at renewal.

For this reason, it is important that all owners and residents take steps to help reduce preventable claims.

The article below identifies 6 Common Residential Strata Insurance Claims and How to Avoid Them

https://chu.com.au/news/residential-strata-insurance-6-common-claims-and-how-to-avoid-them

Using the example of Flexi hoses :

Building A

• Experienced three separate water damage claims in three years due to burst or leaking flexi hoses in different apartments.

The consideration for Building A is there is a trend in claims and specifically water related events occurring which may result in a higher excess for Burst pipe and water damage being imposed on the next renewal as well as a higher claims loss ratio on the policy resulting in a higher rating.

Building B

• Experienced one claim in three years caused by a burst flexi hose.
• After the incident, the Owners Corporation arranged inspections of flexi hoses across all lots and replaced hoses past their expiry date.

Building B in comparison has a claims history which only shows they have incurred 1 loss over 3 years, no trending claims events and because there was 1 claim event, the overall loss ratio is low.