Why Insurance Claims Get Denied — and What Smart Committees Do Differently

Across the strata sector, insurers frequently rely on exclusions relating to wear and tear, gradual deterioration, defects, and lack of maintenance when declining or reducing claims — particularly for water ingress and roof-related losses. So what separates a smooth claim from a painful denial? Not luck. Evidence.

Insurance covers events — not neglect. Strata insurance is designed to respond to defined events such as storms, impact, or fire. What it does not cover is damage caused by long-term deterioration, failure to maintain the building, defects that were known (or reasonably should have been known), or issues that developed gradually over time.

In plain English: if a roof fails suddenly because a storm tore something off, that is one thing. If a roof leaks because sealants, flashings or drainage have been deteriorating for years, insurers may argue the damage was predictable — and therefore excluded.

The real question insurers ask. When assessing claims, insurers are often trying to answer one core question: was this damage caused by a sudden insured event, or was it the end result of an ongoing maintenance issue? Committees that can demonstrate a history of reasonable, proactive maintenance are in a far stronger position to answer that question in their favour.

Read the exclusions, not just the schedule. Every committee should know where to find — and how to recognise — common exclusion wording in their Product Disclosure Statement (PDS). Words like wear and tear, gradual deterioration, and lack of maintenance are not throwaway lines. They are often the basis of claim decisions.

Keep maintenance records like they matter — because they do. Insurance disputes often come down to documentation. Smart committees maintain dated assessment reports, photos of roof condition over time, records of known defects and follow-up actions, quotes and scopes (including exclusions), invoices and evidence of completed works, and committee minutes showing decisions and timing. Together, these create a narrative of reasonable care rather than reactive neglect.

Treat known defects seriously. One of the most common claim problems arises when a defect is identified but not acted on within a reasonable timeframe. Committees do not need to fix everything immediately, but they do need to show they investigated the issue, documented the findings, obtained quotes, applied interim protections if needed and scheduled rectification in a sensible timeframe. Insurers often look unfavourably on claims where a defect was known and left unresolved.

Be professional in the first 72 hours after an event. When something does go wrong: mitigate further damage immediately, take photos and videos before cleanup, document the timeline of events, retain failed components where possible, and notify the insurer promptly. The quality of early information can shape the entire claim outcome.

Why roofs deserve extra attention. Roofs are a frequent flashpoint for insurance disputes because they deteriorate quietly and fail dramatically. Blocked drainage, ageing membranes, deteriorated flashings and historic patch repairs are common areas where insurers argue maintenance — not an event — was the real cause.

Some committees are now adopting structured roof oversight approaches — such as regular independent assessments or roof guardianship-style programs — to create verifiable evidence of roof condition over time. While a standard roof assessment focuses on identifying issues at a point in time, a guardianship-style approach typically extends beyond assessment to support the full lifecycle of roof management: tracking identified defects, assisting with gathering and reviewing quotes for scope, summarising key differences for committee decision-making, coordinating relevant contractor documentation, and verifying that works have been completed before payments are made. This creates continuity and evidence not just of what was found, but of how the committee responded.

These systems do not replace maintenance, but they can help demonstrate that the committee was proactive and informed before a claim occurred.

PDS red-flag words every committee should know. When reviewing your strata insurance PDS, pay close attention to exclusions and conditions containing words like: wear and tear; lack of maintenance; gradual deterioration; developing defects; faulty workmanship or materials; failure to maintain the property in a reasonable state of repair; defects you were aware of (or should reasonably have been aware of); corrosion, rust, rot, or waterproofing failure. If damage can be linked to any of the above, insurers may argue the loss was foreseeable or preventable — and therefore not covered.