This article discusses how apartment owners can challenge an insurer’s assessment in VIC for water ingress insurance claims when repair recommendations are made without proper evidence or testing.
Question: Can we challenge the insurer’s assessment if they recommend additional balcony works without conducting a leak test?
Our apartment flooded due to water entering from the balcony area, damaging the floorboards and the wall. After several inspections, including a leak test, an inspector determined that the issue came from defective door joinery rather than the balcony membrane. We repaired and resealed the balcony as advised before submitting our insurance claim.
The insurer’s assessor has now recommended installing a new waterproof membrane system on the balcony, even though they conducted no further leak test. Are we entitled to challenge the insurer’s findings, and what steps can we take to have the claim properly reassessed?
Answer: You can challenge the insurer’s position, particularly if they have not conducted a leak test themselves and are relying solely on an expert opinion without a thorough investigation.
The general principle with insurance claims involving water ingress is that the cause of the leak needs to be rectified before the insurer will consider resultant damage. Repair requirements are not always simple or clear-cut. There are situations where the insurer may be right or wrong in their assessment, but ultimately, any repairs undertaken must comply with relevant building codes, standards, and waterproofing guidelines. The repairs required should be based on objective evidence, not assumptions.
In this case, if the leak detection test showed no ingress from flooding the balcony itself, but water did enter when the door joinery was sprayed, that raises a legitimate question as to whether the sliding door—not the balcony membrane—was the source of the issue. If so, requiring the balcony membrane to be replaced may not be a reasonable or evidence-based condition to progress the claim.
The insurer’s position can be challenged, particularly if they have not conducted a leak test themselves and are relying solely on an expert opinion without a thorough investigation. However, if the insurer believes the repairs are non-compliant and can provide sufficient evidence to support that position—such as expert reports indicating the repairs do not meet the requirements of AS 4654.2 or the National Construction Code—it may be more difficult to dispute their assessment successfully. Therefore, it is important to clarify whether their recommendation to replace the membrane is based on identified compliance concerns or is simply a conservative view unsupported by technical findings. Ask the insurer to explain why full membrane replacement is required and whether any specific defects or non-compliance issues have been raised in relation to the repairs already undertaken.
If you believe the issue has been rectified and there is substantial evidence (e.g. reports from builders or a leak detection professional) to support that, you are entitled to ask the insurer to reassess their position. If they do not, lodge a formal complaint through their internal dispute resolution process (IDR), and if unresolved, escalate to Australian Financial Complaints Authority.
The Insurance Council of Australia has set out guidance for insurers on how expert reports should be used in decision-making: Use of Expert Reports – Industry Best Practice Standard (Aug 2024). The relevant standard makes it clear that expert reports should not be taken at face value, but must be weighed against all available evidence and assessed for quality and independence.
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 Strata News #769.
Have a question or something to add to the article? Leave a comment below.
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Hi Tyrone. I live in Perth, WA. It’s a 5 story building x 2. We recently experienced water ingress through a glass bricked window causing the wooden window sill to swell up. There’s also mould and the mortar between the glass bricks is falling away. We’ve put it through directly to CHU as a claim. They have advised us that until they can get a plumber to do a leak test from the outside, they are unable to establish if its a claim they will pay or not. This leak is obviously caused by water ingress through the weathered seals & mortar around the glass bricked window. What are our rights and if Insurance say it’s a maintenance issue, then is the Strata liable for the cost of both fixing up the grout/seals externally as well as replace the window sill and the grout internally. Can you confirm this is a common property issue. Its not something we as the owner can fix or maintain as its on the external wall.
Any light you can shed on this would be most helpful.
Hi Christine
The following response has been provided by Tyrone Shandiman, Strata Insurance Solutions:
From what you’ve described, this does sound like an external building envelope issue, and in most cases it would be considered common property – particularly as the glass-brick window, mortar and external seals form part of the building’s external structure and cannot be accessed or maintained by an individual owner.
Insurers generally need confirmation of the cause of the water ingress before they can determine whether the event qualifies as an insurable “accidental damage” claim. If the leak test identifies that water is entering through deteriorated seals, mortar or other external components, the insurer will then assess whether the failure was truly “sudden and accidental” as required under the policy’s insuring clause. In this situation, the “sudden” element is typically the main hurdle. Insurers also apply a range of exclusions relating to maintenance, wear and tear, corrosion, gradual deterioration, developing flaws, building defects, and rectification of faulty workmanship. Based on the details you’ve provided so far, it is likely there will be some challenges in having this claim accepted.
If the insurer declines the claim, it is outside my professional remit to advise definitively on responsibility for repairs outside of an insurance context, as this falls within the expertise of a strata manager or strata lawyer. However, I can share general insight from my experience in strata: external walls—including glass bricks, mortar, waterproofing and similar building elements—are typically considered common property, and the maintenance and repair of common property is normally the responsibility of the Owners Corporation / Strata Company. That said, I would strongly recommend seeking formal guidance from your strata manager to confirm the precise responsibilities in your particular scheme.
Ultimately, the best next step is to wait for the results of the leak test, as this will provide clarity on both the cause and whether the insurer is likely to respond. If the claim is declined, your strata manager will be the appropriate person to advise on ownership and maintenance obligations and to coordinate any necessary repairs.