Strata insurance is important for buildings like apartments and townhouses. It helps cover damages to the property. However, when there is a claim, there is often a deductible that must be paid before the insurance kicks in. This raises the question: who pays strata insurance deductible? The answer can depend on several factors, including the type of damage and the rules set by the strata council.

One key factor is the cause of the damage. If the damage is due to a common area issue, like a burst pipe in the building, the strata corporation usually pays the deductible. However, if the damage happens inside a unit, such as a leak from a homeowner’s appliance, the owner of that unit may be responsible. This can create confusion about who pays strata insurance deductible, especially if the rules are not clear.

Another important factor is the strata’s bylaws. Each strata has its own set of rules that explain how costs are shared among owners. Some strata may have specific rules about deductibles, while others may not. It is important for owners to read these bylaws carefully. Understanding these rules can help clarify who pays strata insurance deductible and avoid disputes among neighbours.

What Are Strata Insurance Deductible Disputes? 

Strata insurance deductible disputes arise when there is a disagreement about who is responsible for paying the deductible amount on a strata corporation’s insurance policy. Typically, when damage occurs in a strata unit and affects common property or other units, the strata corporation’s insurance covers the repair costs. However, the strata corporation may hold the owner of the unit responsible for the deductible, which can be a significant amount, often ranging from $25,000 to $100,000 or more. This situation creates tension between the strata and the unit owner, especially when the owner believes they should not be liable for the deductible.

Under the Strata Property Act, a strata corporation can sue an owner to recover the deductible if the owner is deemed responsible for the damage. Importantly, the law does not require proof of negligence for the owner to be held responsible; simply being the source of the damage is enough. For example, if a dishwasher in a unit overflows and causes water damage, the strata corporation can charge the owner for the deductible, even if the owner did not act carelessly. This leads to the question of who pays strata insurance deductible, as owners often find themselves liable for significant costs without clear fault.

Disputes often arise when owners challenge the strata corporation’s decision to charge them for the deductible. Some recent court cases have examined whether the strata’s bylaws require a higher standard of responsibility, such as proving negligence. In some instances, tribunals have sided with owners, stating that without evidence of negligence, the strata cannot enforce the deductible charge. This evolving legal landscape highlights the importance for strata owners to understand their insurance coverage and the potential financial implications of being deemed responsible for damage in their units.

Common Misconceptions About Who Pays Strata Insurance Deductible