There are different types of insurance that cover different areas or aspects of strata property ownership.
If one lives or has lived in a strata property, you will be aware of what it means to share the joy – and burdens — of community living. One thing that can really make a difference when burdens come your way however, is comprehensive strata insurance.
Strata property owners typically share the premium costs of strata insurance and contribute to these through strata levies. Strata insurance is mandatory and must also include public liability covering people that may be injured on common property.
If living in a strata property, it is wise to take out comprehensive strata insurance to protect the investment. The three types of insurance one needs to consider are strata insurance, contents insurance and landlord insurance.
What strata insurance cover do I have?
Residential strata insurance typically covers common contents and common property under the management of a strata scheme. This type of insurance doesn’t cover the contents and personal items belonging to owners or residents.
Importantly, many strata insurance providers offer a number of additional add-on policies for extra cover that may add to the insurance premium. The extra protection will offer peace of mind, and extra assistance should something go wrong. The add-on policies that should be considered include:
- Office bearers liability: Covers wrongful acts by the committee or manager, including legal representation.
- Fidelity guarantee cover: Covers the event of loss of funds through fraudulent activity.
- Catastrophe: Australia has a history of extreme weather events. Catastrophe insurance can cover your replacement costs due to natural disasters like bushfires, earthquakes, floods and cyclones. It is best to check the insurance policy for the coverage of your property, definitions, inclusions and exclusions, or ask your body corporate manager.
- Machinery breakdown: Elevators are extremely expensive to repair. Cover includes machinery on common property such as air-conditioning, water pumps, door/gate motors, boilers and pressure vessels.
- Personal accident/voluntary workers cover: Covers voluntary workers responsible for duties in your scheme or the event of serious accidents resulting in a permanent injury or unforeseen death.
- Government audit costs: Covers audit costs, as well as legal defence and appeal expenses.
Contents insurance
Strata insurance only covers common property, common areas and commonly owned contents, it does not cover anything within a personally owned lot or unit. This is covered by a contents insurance policy that needs to be held by the unit owner.
Contents insurance covers household and personal possessions such as clothing, jewellery, furniture, computers, art, electronics and white goods belonging to you in the event of loss or damage.
Landlords’ insurance
As an investor renting a unit in a strata building to a tenant, it’s wise to take out landlord insurance. This type of policy provides cover for accidental loss or damage to the contents of the unit from events such as fire, flood or storms. Additionally, it covers the owner and the property for any malicious damage to contents/buildings caused by tenants and/or their guests. It can also help you cover the risk of your tenant failing to pay rent.
While strata properties are a good long-term investment, it is important to do everything one can to protect that investment. That’s where strata insurance comes in. By taking out comprehensive strata insurance, contents insurance and landlord insurance policies, you can rest assured knowing that the property will be covered in the event of damage, loss or a natural disaster.
