Strata Water Damage Ruling Highlights Claims Communication Risk

The dispute, reported by Insurance News on 22 October 2026, involved a retired couple in their seventies who lived rurally but owned a city apartment used for medical appointments and other commitments. Their apartment became uninhabitable after water damage in June 2024. Chubb’s appointed builder carried out leak detection testing but did not identify the source. The owner later made a long return trip to the apartment, investigated the problem himself and provided photos and video showing the source: loose screws between an ensuite toilet cistern and base.

AFCA found the insurer’s handling of the claim had caused an unusual degree of inconvenience and disruption. Chubb was required to pay $5,000 in non-financial loss compensation, reimburse a plumbing report fee and cover the owner’s travel costs, with interest. The ruling also noted that the apartment remained unrepaired and uninhabitable for seven months, affecting the couple’s ability to access accommodation close to medical services.

For strata communities, the case is important because it was not simply about whether water damage existed. It was also about process. Chubb said it had followed protocols for strata-managed properties by communicating through the owners corporation’s broker. AFCA accepted that strata claims often involve intermediaries, but found it would have been fair and reasonable to adjust administration so the affected owners received copies of key claim information.

That point matters for committees, strata managers and lot owners dealing with strata insurance claims. A building policy may sit with the owners corporation, but the direct consequences of delay can fall heavily on individual residents or investors. Where a unit is uninhabitable, missing reports, unclear next steps or repeated handovers can quickly turn a technical repair issue into a significant personal and financial disruption.

The broader lesson is not that every delay will lead to compensation, or that every lot owner should bypass the usual claims pathway. Rather, the ruling reinforces several practical habits:

• record damage, access issues, health concerns and accommodation impacts as early as possible;
• ask who is responsible for passing on builder reports, scopes of work and claim decisions;
• flag vulnerability factors clearly, including age, illness, disability or medical access needs;
• keep a timeline of inspections, promises, reports requested and unanswered communications;
• escalate concerns through internal dispute resolution if a claim is stalling or information is not being shared.

For owners corporations, the case is a reminder that efficient claims handling is partly about governance. Clear communication protocols at the start of a water damage claim can reduce confusion, preserve evidence and help avoid disputes about whether the insurer, broker, strata manager, committee or affected owner was meant to act next.