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Whether you're living in a building as a tenant or are the owner of a complex, there's a strata insurance policy to suit your needs. Choosing the correct policy to cover yourself and your tenants, and that satisfies legal requirements which vary from state to state, seems a daunting challenge. But before you pull your hair out, let us help you solve the puzzle of quality strata insurance.
Residential strata insurance is the general insurance that covers any commonly used areas within the property. It provides cover for the building and common property that is shared by people living in a townhouse, duplex or set of flats.
It’s basically insurance for areas you share with your neighbours, and the building itself. This includes things like lifts, pools, car parks, gardens, balconies, driveways and swimming pools.
It’s also referred to as body corporate, owners corporation, common property or residential strata insurance.
Strata insurance premiums are usually shared between owners and tenants, often being included in strata fees and liabilities.
Do I need strata insurance?
So is strata insurance compulsory? Yes. Strata insurance is mandatory under each state’s relevant strata legislation. Just as cars must have a CTP, each strata title owner is required to have sufficient strata insurance.
What does residential strata insurance cover?
Each policy is different and you should check what is covered under your policy. However, strata insurance typically covers the common and/or shared property as defined by the title of the property.Confused as to what this all means? Basically, you’ll be covered for anything your tenants all have access to, such as:
- Walls and windows
- Ceilings and floors
- Shared contents (like washing machines, gardening equipment and shared gym equipment)
All policies must provide liability cover in the event of injuries on common property.
What doesn't it cover?
Like all insurance policies, it’s the exclusions you need to take equal note of. Different providers include different exclusions, so be sure to read the terms and conditions carefully, as these can often be targeting certain risks, such as flood or landslides. But general exclusions are usually:
- Fixtures that can be removed without causing damage to the property.
- Any temporary structures, like caravans, houseboats and motor vehicles.
- Any carpets, rugs and curtains.
- Air conditioning units that service a particular unit.
- Lawns, garden areas, trees or plants in the grounds.
- Any part of your building used for any business activity unless it’s shown on your certificate of insurance.
- Personal items and contents (either your own or your tenants’).
What factors can contribute to strata insurance premiums?
Each provider will have specific factors and considerations, but common factors that can affect premiums are:
- Government taxes on insurance (stamp duty and GST).
- The age and condition of the building.
- The replacement cost of the building.
- The risk profile of the location (such as on a flood plain or high crime area).
- The claims history of the strata complex.
- Commercial activities carried out on the premises (holiday letting, community events, etc).
- Fees and commissions from agents.
- The costs of common property (such as fire protection systems, lifts and pools).
Adjusting the level of excess payable at the time of a claim is another way of bringing premiums down.
Who offers strata insurance?
There are numerous insurance providers within Australia who offer a range of varying strata insurance cover. Strata managers and body corporates often employ a broker or specialist underwriting agency to help negotiate the right cover for their titles. AAMI, GIO, NRMA and RACQ are just a few of the providers offering residential strata insurance policies.
What's the difference between strata insurance and landlord insurance?
|Strata Insurance||Landlord Insurance|
What's the difference between residential and commercial strata insurance?
Strata insurance is split into two categories, residential and commercial. Basically, residential is for anyone living in a building and commercial is for any building that’s only used for business purposes.
Both residential and commercial strata properties are required to have the relevant insurance in place. Each state and territory has its own specific terms and conditions needed for strata insurance, and most providers will cater to certain states and strata types.
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