What is the claim procedure following damage to a section?

We were recently asked about the process to follow when submitting a claim for damage to a section in a community scheme. Here is how I responded:

First step

The first step is to determine whether the damage and its cause are claimable, and to assess the extent of the damage. Unless it’s a serious flood, fire, or major loss, and even then, if unsure, the owner should consult a contractor or building expert to identify the cause, recommend the appropriate repairs, and provide a quote. When in doubt, contact your broker for guidance.

Once you have a report and quote, submit it to your broker. I always encourage clients to call and ask questions. It’s what brokers are there for. Providing advice is a core part of a broker’s role, and we are always happy to assist.

That said, this is the general approach I recommend, but I know not everyone follows the same path. Some schemes and managing agents have their specific protocols. Each scheme is unique, and so are its internal procedures.

Establish your own claims process

Ideally, every scheme should establish a claims process that fits its specific setup and circumstances, working closely with its managing agent and broker to do so. Some schemes prefer all claims go via the managing agent, others may involve trustees, the estate manager, the broker, or make use of an online platform, online claim pages or an app such as those offered by Addsure.

A key point to remember is that, by law, the body corporate is the insured party, regardless of what the insurance contract may state. This means any claim should be signed off per PMR 10, i.e., by two trustees or one trustee and the managing agent. It’s not just about approving the claim. They are attesting to it. That distinction matters.

No cash-in-lieu

Furthermore, according to the functions set out in the STSMA, the body corporate should ensure that any insurance payout is used specifically for the necessary repairs. For this reason, the body corporate will always be involved in one way or another. Cash in lieu of repairs isn’t in the spirit of the legislation.

We do our best to clarify claim vs. non-claim situations in our booklets, blogs, and YouTube videos, giving owners and trustees a better understanding of what insurers are likely to cover before starting the claims process. We also provide practical advice on how to claim your rights in the process, and how to navigate the journey from damage to resolution.