With approximately $1bn worth of insurance claims logged annually in Strata, the maintenance and repairs of aged buildings are becoming a significant issue for Owners Committees and Strata Managers across Australia. In the following article, we’ll cover some common causes of losses in aged buildings, and actions owners can take to minimise the risk of loss. We’ll also explain how gradual and hidden damage can impact claims.
Safety First: Electrical Wiring
- Wiring can deteriorate over time, particularly when exposed to moisture or used at higher loads. Watch for electronics mounted on wood, ceramic fuses, and poorly arranged wiring. High electrical demand may overload circuits, so be sure to test the safety and overload switches.
- To reduce the risk of electrical faults and fire, have your non-destructive testing carried out by a certified and licensed electrician. Comprehensive testing should include auditing of visual wiring, electrical circuit scanning, plus annual thermographic (infrared) scanning for loose connections, load imbalances, overloading, and hotspots.
Red Flags: Roofing & Guttering
Conducting regular roof and gutter inspections, alongside actioning any required maintenance can reduce the chance and/or severity of loss amid untoward events.
Be sure to review the following in your inspection:
- Structural timber: inspect under the roof for cracks caused by the roof weight too.
- Rust: typical problem spots include where metal sheets overlap, around screw or nail holes, and where previous impact damage has occurred. Leaks in tiled roofs are normally caused by cracked mortar, loose ridge capping, and cracked tiles.
- Inspect all drains for blockages, debris, and vegetation. Overflowing drains may indicate blockages or a need for more drains and downpipes to be installed in accordance with industry standards.
- Plumbing leaks and failure: check for evidence of corrosion, rust, or decay to piping and tubing used on both incoming and outgoing water supply lines. Supply lines made from copper typically have a lifespan of 70-80 years, while brass or galvanised steel lines typically last 80-100 years. This said, supply lines are often under constant pressure, and the smallest failure can result in significant water damage to the building and its contents. Outgoing drain lines are often made from Polyvinyl Chloride (PVC) which normally has a lifespan of 25-40 years. Check for pipes that are leaking, cracked, have darkened or changed colour. Joints, connections, and old flexible couplings are typical weak spots. To ensure you’re ready to troubleshoot leaks, familiarise yourself with the location of the property’s main water isolation valve.
Beware: Building Materials
- Combustible materials: it is common for aged buildings to contain combustible materials such as timber. Caution should be taken when conducting works/renovations on or near these materials. For further information, be sure to review Honan’s recent insights on identifying combustible cladding.
- Asbestos: In 2003, an Australia-wide ban on asbestos was enforced. Prior to this, asbestos was used in many products including walls, fencing, downpipes, and eaves. In the instance of a loss, the presence of asbestos can significantly increase repair/rebuild times. Be sure to review your insurance coverage and its response to property damage claim clean up in the instance Asbestos is present – this is an important consideration for a claim payment.
Types of Damage & Implications for Claims
Gradual damage is damage to property that may start small but is visible. Gradual damage includes wear and tear, corrosion, rot, and mildew. An example is water damage to walls or ceilings such as stains and bubbling paint. Such damage may appear to be minor at the onset but has the potential to worsen over time due to ongoing seepage. This type of damage is generally NOT covered by insurers. Such damage is distinct from sudden, accidental water damage (which Strata policies generally cover). Gradual damage can trigger a gradual deterioration exclusion, which is common to all Strata policies.
Hidden gradual damage is NON-visible. It includes rot, mildew or other deterioration caused by water leaking from a water pipe behind a wall or waste disposal pipe. An example of hidden gradual damage could be a slow leak from a rusted or corroded pipe gradually damaging a wall/cavity behind a shower, including mould, rot, and mildew concealed by shower tiles. Such hidden gradual damage is usually classified as long-term damage/gradual deterioration. However, some insurers are open to considering cover for resultant damage on the basis that the insured could not have reasonably known about the leak due to it being hidden. Many insurance policies also contain mould and mildew exclusions, which can further complicate the claims process and reduce settlement outcomes.
We’re with you all the way.
Upholding a regular schedule of maintenance and inspection can help avoid issues with insurance cover related to aged buildings. To find out how Honan can help secure protection for your Strata assets, please reach out at any time.
Kieran Drum – National Head of Strata
+61 3 9947 4348
Poppy Foxton – Head of Claims
(02) 9299 0767