This article discusses how Queensland body corporate committees can manage stalled insurance claims caused by unresponsive lot owners.
Question: What can the committee do if a lot owner refuses to respond to an insurance cash settlement offer? The delay is affecting other residents and future insurance renewals.
Our committee is dealing with a lot owner who won’t respond to a cash settlement offer from the insurance company relating to their building insurance claim. Is there a time limit for how long the offer can remain unresolved? Their refusal to engage or negotiate is frustrating. It prevents us from finalising the claim, affects our ability to secure future insurance policies, and contributes to higher premiums.
The owner says their mental health has suffered due to their living conditions, but they’ve taken no action to move the matter forward. We’ve changed strata managers and insurance brokers to more proactive ones, referred contractors, and done everything we can to help, but the situation remains at a standstill. The unresolved issue is also affecting neighbouring residents, as there are no floor coverings in the unit, leading to excessive noise transfer and ongoing stress for everyone involved.
Answer: The requirement to address the noise issues may provide the body corporate with a pathway to seek an adjudicator’s order requiring the lot owner to address the flooring issue.
From what you’ve described, it seems there are two separate but related matters at play:
Finalisation of the insurance claim
The first issue relates to the insurance claim and the cash settlement offer. An insurance claim can technically remain open until it is resolved, but if the insurer does not receive instructions from the claimant, they may eventually close their file. Generally, insurers will consider reopening a claim once the owner makes their decision, provided it relates to the same loss event.
If the ongoing management of this claim is creating an administrative burden for the body corporate, you may consider asking the lot owner to deal directly with the insurer. This would allow the insurer to continue corresponding with the owner and determine how best to bring the matter to a final resolution, whether by keeping the file open, closing it temporarily, or taking other appropriate action. Importantly, there is no fixed statutory “time limit” that forces the claim to expire, but insurers will not leave claims dormant indefinitely.
Noise and flooring issues
The second issue concerns the lack of floor coverings in the lot and the resulting noise disturbance to neighbouring properties. While this matter originated from the insurance claim, it also raises potential obligations under the Body Corporate and Community Management Act 1997. In particular, there may be provisions requiring:
- An owner to maintain their lot in good condition; and
- Owners not to create a nuisance or interfere unreasonably with another occupier’s use and enjoyment of their lot or the common property.
These provisions may provide the body corporate with a pathway to seek an adjudicator’s order requiring the lot owner to address the flooring issue.
That said, this is not something we, as insurance brokers, can advise or intervene in. It falls outside our professional remit. If you wish to explore this further, you may wish to contact the Commissioner’s Office for Body Corporate and Community Management, discuss it with your strata manager, or obtain advice from a body corporate lawyer.
Legal considerations
These matters can be complex, particularly where insurance and nuisance issues overlap. While the points above provide useful context, we strongly recommend that the committee obtain independent legal advice on the full circumstances before deciding on next steps.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
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 Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in the November 2025 edition of The QLD Strata Magazine.
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