Navigating Small Claims in Strata Insurance

This article, with insights from Tyrone Shandiman, Managing Director of Strata Insurance Solutions aims to guide Strata Insurance policyholders through the decision-making process of whether lodging small claims in strata insurance is worthwhile. 

What Constitutes Small Claims in Strata Insurance? 

A small claim in the context of strata insurance typically refers to a claim that is under $500.00. This threshold is significant as it often poses a dilemma for policyholders: to claim or not to claim. It's an essential consideration, given that for insurers, the administrative cost of processing a small claim can sometimes exceed the claim settlement itself. 


The Impact of Small Claims on Future Policies 

One critical aspect to consider is the impact of small claims on your claim’s history. In Australia, having a series of small claims can influence both your insurance premium and the excess you might have to pay. This is because insurers assess risk based on claim frequency, and a higher number of claims, regardless of their size, can be interpreted as an increased risk. 


Making the Decision: To Claim or Not to Claim? 

When deciding whether to lodge a small claim, individual circumstances must be carefully considered. For instance, if an owner insists on lodging a claim, we generally do not advise attempting to prevent this. However, if the claim is under $500 and both the owner/committee are willing to consider the bigger picture, we usually advocate for not proceeding with a claim. This recommendation is primarily due to the potential negative effects such claims can have on the claims history. It is important to weigh the costs of filing a small claim, including the time and administrative expenses involved, against the potential benefits. In cases where the costs appear to outweigh the benefits, it may be wiser to not pursue the claim. 


Conclusion: A Strategic Approach to Small Claims in Strata Insurance

In conclusion, while small claims might seem straightforward at first glance, they require a strategic approach, especially in the context of strata insurance. Assessing whether lodging a claim is worth it depends on individual circumstances and should be considered carefully. Remember, each claim you lodge could potentially affect your future insurance costs and coverage options. 


Strata Insurance Solutions, with their expertise in this field, emphasises the importance of being informed and making decisions that align with your financial and insurance goals. Stay updated and informed by following Strata Insurance Solutions on platforms like LinkedIn and YouTube, where we regularly share valuable insights and updates on strata insurance and related topics. 

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.