Water damage is one of the most common causes of strata insurance claims. Significant claims will have an impact on insurance premiums on renewal. The key is to minimise claims with a good maintenance/prevention regime in place both at the building and lot owner level.
The intent of strata insurance is to cover claims for water damage that is sudden and accidental. In many instances, strata insurance will cover the hidden perils of burst or leaking pipes when physical evidence of damage is first noticed and a claim is made.
Water problems may not be noticed until there is physical evidence like mould, dampness or leakages. At that stage of discovery, in our experience, the impact will be greater and, in many instances, will have spread to multiple apartments/ lots and common areas.
Flexible stainless steel hose pipes (flexi hoses) are popular because of their ability to bend into shape and their low cost (approximately $8 per unit). They are generally hidden beneath bathroom and kitchen sinks in strata complexes across australia, and have a life expectancy of 10 years.
Flexi hoses are responsible for many thousands of dollars in water claims when something goes wrong.
Flexi hoses were installed in the bathrooms and kitchens of a medium-sized apartment complex.
The flexi hose in one of the upper-level apartments split when most of the occupants were away from the premises, and water flooded the bathroom before spreading and meandering downwards through three floors of the complex prior to discovery.
The building repair bill was a staggering $80,000.
Five apartments had contents damage with the majority having no contents insurance.
A further inconvenience was that the apartments were uninhabitable and their occupants had to vacate their homes for approximately four weeks while repairs were undertaken. Alternative accommodation was approximately $350-$500 per unit per week.
Regular checks of the flexi hoses were not part of any maintenance programme which would have picked up the faulty flexi hose and allowed replacement at a cost of approximately $8 per unit.