The Strata Titles Amendment Act, which came into effect on May 1st 2020, introduced new regulations surrounding insurance.
- A Strata Company must ensure all insurable assets of the scheme must be insured against fire, storm and tempest (excluding damage by sea, flood or erosion), lightning, explosion and earthquake to replacement value. (Insurable assets means the common property and scheme including fixtures and improvements on the common property)
- A Strata Company must be insured against damage to property, death, bodily injury or illness for which they could become liable. The minimum insured amount for Public Liability has been increased from $5 million to $10 million.
- Fees for non-compliance of this clause have increased to $3,000
- A 12 month grace period will apply from the proclamation of the Act
Why will the minimum insurance amount increase?
- Most Western Australian strata insurance companies do not offer public liability cover for less than $10 million.
- Most managed schemes already have at least $20 million cover.
- $5 million is no longer considered sufficient to cover potential liabilities in the case of damage, injury or death claims.
What if I can’t obtain the required insurance
- If a strata company has taken all reasonably practical steps but no insurer is willing to enter into a contract with them on reasonable terms that meet the requirements, the strata company must obtain whatever insurance it can
More information can be found in the following sections of the act; Part 8, Division 1, Section 97 and Schedule 2A, Part 5, Section 53
