Australian Ombudsman Orders Strata Insurer to Pay Cyclone Damage Claim

Australia's insurance industry ombudsman has directed a strata insurer to pay a cyclone damage claim, ruling that the insurer could not withhold the payout on the basis that homeowners had not yet completed certain maintenance work. The decision addresses a recurring tension in property insurance disputes: how far an insurer can rely on a property's condition or maintenance history to reduce or deny a claim after storm or catastrophe damage. In this case, the ombudsman found that the insurer was not entitled to make settlement conditional on future maintenance being carried out, requiring it instead to meet the claim. The ruling matters for strata schemes, which cover shared apartment and townhouse buildings and rely on collective policies to fund repairs after events such as cyclones. It underscores the importance of clear policy wording around maintenance obligations and the circumstances in which claims can be reduced. For policyholders, the decision offers reassurance that insurers cannot indefinitely defer payment by pointing to outstanding upkeep, while for insurers it is a reminder to substantiate any link between property condition and the damage claimed. Weather-related claims remain a significant pressure on Australian insurers.