Last week we watched another predicament unfold in one of Sydney’s new apartment blocks – this time in Parramatta’s high-rise Altitude building. After a blocked pipe caused major flooding in at least 4 units, the affected residents have not only lost all their contents to sewage damage but some have also been hit with emergency accommodation costs, with no promise of compensation.
Residents reported a leak coming from an empty unit on the 9th floor, but before long water was spraying out of the unit and down onto the floors below. This included a large balcony on the 4th floor which caught the worst of the flow, but allowed the water to flood back into the unit.
As residents discovered “big puddles” throughout their homes, they were then notified that the water was found to be septic, holding potential health and safety hazards. One resident from Altitude describes the total loss of her contents.
“Everything has been dripping out of the walls, everything is just sewage. All my contents have been covered in it.”
As well all their furniture, clothing and personal effects being destroyed, the renters of the affected units have also had their leases immediately terminated, forcing them to find emergency accommodation.
Meriton, who manages the building, quickly found them rooms in their hotel next door, which cost around $2,000 up-front for the week. However they aren’t obligated to cover the accommodation costs for tenants, as it’s not a requirement of their insurance policy.
The leak has been attributed to sanitary products or wet wipes causing an obstruction in a pipe. An issue currently in the spotlight as the ACCC appeals it’s federal case against one supplier after multiple instances of sewerage blockages and overflows have been reported across Australia.
Who’s got cover, and who has to cover the costs?
We don’t know what insurance the residents and owners of Altitude have – but when it comes to making large claims in strata-titled properties it can get a bit complicated when it’s not clear who’s policy covers what.
Here’s what you should be covered for if you ever found yourself in a similar situation to the one in Parramatta. But as all covers are different, check the following cover in your insurance policy, and your Strata’s policy.
Insurance for renters
If you’re renting, it’s easy to think you don’t need Contents Insurance, or you choose to individually insure a few key items. However your cover is not only there to protect your possessions, but also to financially protect yourself.
In the case of the Altitude tower, with contents insurance for renters you’d be able to claim for:
● Emergency accommodation costs
You won’t have to pay rent while you’re not living in the property, but your insurance policy will cover the costs of your temporary accommodation. Without it, you might find yourself paying for a hotel room, which is likely to cost a lot more than your weekly rent.
If your lease was terminated completely and you’d need to find a new home, you could get stuck between covering your accommodation costs, at the same time as putting down a new deposit and bond, while you’re waiting for yours to be refunded.
● Replacing your furniture and possessions
A landlord’s policy will only cover the owners fixtures. It won’t extend to any of the items that belong to you in your home, so you would need insurance to claim for your furniture, interiors and possessions. Just imagine the cost of replacing your entire wardrobe or home-office, if you don’t have insurance!
Landlords insurance isn’t a legal requirement – but it’s a big risk to rent your property without it. It’s not only there to protect your property, but also your investment and any legal fees.
If your investment property was flooded, in the same way as Altitude was, here’s what you would likely be able to claim for:
● Loss of rent
This is the most common landlords insurance claim, and it is only covered by a landlords insurance policy. If your tenants are evacuated temporarily or permanently, they won’t be paying rent. But with landlords cover, you’ll be able to claim for the lost rent, which would be crucial if you still have a mortgage to pay or if your property is a key revenue stream.
● Legal liability
As well as the legal liability cover for your tenants, you’re also liable for any tradespersons working there. Once your property is being repaired, anyone working within your property could make a claim against you should they get injured, so you’ll need liability cover in your policy – even if they’ve been brought in by your Building Manager.
● What you won’t need to claim for
You’ll need to claim for your contents and interiors, like carpets, light fittings and any appliances you’ve provided for your tenants. However your building’s Residential Strata policy will often cover any damage to your bathroom fittings, built-ins and doors. When you take out your policy, speak to the Strata Manager to find out what’s covered by their policy in your apartment or unit.
Contents Insurance for owners
If you’re the Owner Occupier living in an apartment block or complex, you’ll need to have insurance for your home and contents, and some fixtures will also be covered by your insurance policy. Here’s what you will likely be able to claim for – and what you might not need to:
● Temporary Accommodation
If you have to leave your property for the clean-up, your contents insurance policy should cover your accommodation costs. However your building’s residential strata insurance policy should also provide some cover for this. Check with the Strata Manager to see which events their policy covers, and find out how many weeks of cover they’ll provide, and the quality of the accommodation. If you were to get caught without it, you might find yourself simultaneously paying a hefty hotel bill on top of your regular mortgage payments.
● Your contents and fixtures
It’s not always obvious who has ownership of some fixtures and fittings in a strata-titled property. But you can claim for items like your carpets, curtains and white goods, whereas fixed tiling, bathroom fixtures and windows will be covered by your Strata’s insurance policy.
● Legal liability for the clean up
Legal liability claims can be some of the most expensive. They cover you for treatment or repairs to someone or their property, and also any loss of earnings or legal fees.
If you have tradespeople in your home for the restoration, even if they are working on jobs for the rest of the building, you could be liable if they get hurt within your home – the strata’s policy might only cover them in the common areas.
If you’re confused by your cover
If you’re unsure about what cover your need for your home, speak to your Strata Manager or Landlord to clarify which parts of your home are covered by their policy, and ask your insurer to check what’s included in your policy. Access an exclusive offer on CHU Landlords and Home Contents Insurance policies at smartercommunities.com.au/chu