From March 1st, if you insure your residential strata property with CHU you will do so under their newest policy wording.
CHU’s summary of key changes can be found here but please, for the love of strata, take the time to read the full wording!
In this article we will outline the five changes that will have the biggest impact for policy holders.
1. Floating floors now included
A common event in strata is the flooding of a unit and an always confusing component of a claim is who covers the flooring. Permanently affixed flooring like parquetry has always been covered by strata policies however floating flooring (the type with an underlay) was previously not included in the standard CHU policy. This new inclusion is big for policy holders as it means there is a smaller chance of having to claim on contents policies and less conjecture about whether the strata policy or contents policy will pay for a loss of rent/temporary accommodation claim.
2. Paint/wallpaper now included
The strata legislation in NSW notes paint and wallpaper not to form part of the building and as such CHU have previously charged extra for this to be included. If not purchased, this was a massive pain for unit owners as in many cases they’d get a wall repaired by the strata policy but not painted. Whilst not usually that expensive, it generally left the unit owner scratching their head trying to understand why the repair didn’t get fully completed. This inclusion will make the process simpler and easier for all.
3. Rent abatement now included
A tricky circumstance arises when a tenanted unit becomes disrupted either by damage or repairs, causing the tenant to not have full access or the ability to fully enjoy the unit - but not so much so that they must completely move out. Perhaps the loungeroom couldn’t be used during repairs. Or maybe a water damaged benchtop made it hard to cook. Due to the limited amenity, the tenant may have the right to a rent reduction under their lease but the owner previously did not have any protection against this type of loss. CHU have now included cover for this however a 3-month limit from the disruption date does exist.
4. Defective design or specification now explicitly excluded
From time to time a building suffers damage due to or in an area that has a design or specification flaw. The policy covers repairs to the damaged area however these may not be able to be completed due to the design or specification flaw. Examples could include:
1. A retaining wall that was not designed appropriately
2. Cladding that was not installed to appropriate specifications
3. A missing essential roofing component such as sarking
The previous CHU policy was silent on this which at times resulted in lengthy disputes when these situations arose. CHU have now put in a specific exclusion stating they will not rectify these types of issues which makes it clear come claim time.
5. Loss of Rent/Temporary Accommodation extended
The CHU policy has strong cover for Loss of Rent and Temporary Accommodation when a unit was damaged however previously a gap existed for when a unit couldn’t be occupied due to the breakdown of machinery. Perhaps the elevators in a high-rise fail or the heating/cooling systems breakdown and make the unit unable to be occupied. CHU now includes protection for the unit owner in these circumstances.
In addition to these major changes several benefit limits have been increased, a few clauses reworded for the sake of clarity and the document itself has a fresh layout and graphics for easier reading.
All in all, this policy update is positive for owners and CHU retain the StrataRatings Platinum Award for their Residential product.
You can find our full award list here!