Do you own a strata titled property? Whether for residential or commercial occupancy, there is a specific insurance that covers strata titled properties for property damage, common property, contents and areas and legal liability.
Strata Insurance is commonly arranged by your Body Corporate Manager however if it’s just you and a neighbour or two, here are a few Strata Insurance basics.
Did you know it is mandatory for most of Australia?
Strata Insurance (also called Body Corporate Insurance) is mandatory for titled properties with each State and Territory having different legislative requirements. There are numerous providers of Strata and its little brother Community Title Insurance (which is liability cover for common areas only) in Australia, and all offer a similarly structured policy, each with their own suite of additional benefits and different limits of cover and indemnity.
What does it actually cover?
A Strata Insurance policy is broken down into a number of sections. Some covers are mandatory like the property damage and liability sections and some are optional, like machinery breakdown or Office Bearers Liability.
The policy will cover the building and any outbuildings at the property, including fencing, for property damage and loss as a result of insured perils and with most insurers, for accidental damage or loss also. The policy will also cover any common areas contents (washing machines in a shared laundry for example, or shared gardening equipment kept at the property).
Other sections are public liability for the property and common areas – think car parks, common gardens, lifts, gyms and swimming pools etc. This section covers the property owners for their liability for injury to third parties as a result of failing to maintain the property or common areas, or for negligent acts in relation to them.
What doesn’t it cover?
Strata Insurance won’t cover your contents whether as an occupier or a tenant’s contents. In most cases, fixtures and fittings will be covered by the Strata policy, however this can vary between insurers and also State and Territory requirements. It’s safer to assume that your Strata policy is NOT going to cover any of these, so a separate Contents Insurance policy (if you’re living in the property yourself) or a Landlords Insurance policy if you have tenants, will cover this off.
Contents are defined differently from insurer to insurer again, however they usually mean your personal items, furniture and effects etc and will usually include your carpets and any appliances that are not permanently plumbed or fixed to the property. Most Contents insurers will have a proviso in their policy wording that allows for fixtures and fittings in strata properties where the Strata Insurance has excluded them, so this can help plug any gaps.
Home and Contents Insurance doesn’t have to be complicated, but it pays to know the basics and make sure you understand that not all insurance companies and policies are the same, despite what some might tell you!
“Do I really need special insurance for my rental property, or will the usual home insurance do the job?”
Do you live on a property larger than 5 acres? You may need to consider a few extra aspects to your insurance than you would with a standard home and contents policy.