Damage From Underground Tunnelling – Covered By Insurance Right? Right??

With Sydney, Melbourne, Brisbane and even Adelaide working on underground rail networks, the begging question is “Does my strata insurance policy cover damage caused by underground tunnelling?”

Whilst you’d think the risk of damage is somewhat low considering modern tunnelling techniques, it wasn’t that long ago that a block of units in Sydney not only suffered damage but partially collapsed due to underground tunnelling.

Fortunately, no one was injured from the incident however a very costly repair bill would have been seen by the Owners Corporation.

Whilst building collapse should be a very rare occurrence, other costly damage can occur such as cracking and general structural instability.

So, where do you stand with your insurer if this is to occur?

Let’s dive into the relevant exclusions from the Platinum-rated policy wordings from the 2019 StrataRatings – CHU, SCI, and SUU.

CHU

…We will not pay for Damage caused by…the removal or weakening…of land or buildings…or Earth Movement…

SCI

…We will not pay for…Damage…caused by...the removal or weakening of…the support of land or buildings…or Earth Movement…

SUU

…We will not pay any claims for Damage…from…the removal or weakening of…land or Buildings or…earth movement…

In short, this type of damage is not covered.

To recover these damages, the Owners Corporation would need to pursue the tunnel developer. And you guessed it, this would likely mean a very substantial levy to raise funds to pay for lawyers to fight it out.

Some tunnel developments will have systems in place to address these types of damages however the comprehensiveness of these are to be seen.