When assessing your insurance needs in a strata environment, it’s important to understand what you actually require. There is a common misconception that the strata insurance held by the Owners Corporation covers the entire building, but this is not the case.
Here’s what you need to know about the differences between strata insurance, contents insurance and landlord’s insurance.
Strata insurance for buildings, common property and infrastructure
Strata insurance is a type of building insurance that covers the common property and infrastructure in the strata scheme. The policy does not cover any personal property belonging to unit owners, such as furniture or appliances. It also protects against liability claims for damage caused by others on the common property or by your own actions. For example, if someone slips on a wet floor in the building and it was caused by negligence or fault, they could make an injury claim against you as part of the compensation package. This type of claim would be covered under a standard strata policy because it was related to something happening within the building.
The Owners Corporation, in accordance with the Strata Schemes Management Act 2015, must take out strata insurance and the cost is covered by your annual strata fees. This is where the confusion comes in – you’re paying for it, so it should protect you, right? Unfortunately not. It protects your investment as a lot owner by covering the common parts of the building that every owner effectively has a stake in. But you’ll need different insurance for your own belongings.
Contents insurance to cover your valuables and personal belongings
Contents insurance is a type of insurance that covers your valuables and personal belongings. You would need this type of insurance in the event of a fire, water damage, theft or other issues affecting the belongings inside of your strata home.
Contents insurance typically includes:
- Contents including appliances, furniture, electronics, clothing and more
- Personal items of value, such as watches or jewellery
- Household plants
Landlord’s insurance for owners and investors
Landlord’s insurance is a type of property insurance that covers you for any liabilities you may have as an owner within a building. It covers your legal responsibility to maintain the structure and fixtures in your building, as well as any personal belongings that are left on site by tenants.
An owner/investor usually takes out this type of insurance to ensure they are covered in the event of accidents, damage to property or any other liability. It can also cover a landlord against injury or compensation claims should a tenant suffer an injury in the apartment. As with all insurance policies, each one is different, so it’s worth doing your research first. This ensures you get the right type of cover for your individual circumstances.
Need help managing insurance in your strata scheme?
The reality is many Owners Corporations and strata committees don’t have the expertise to manage insurance and other financial matters. This can lead to strata schemes losing money, being mismanaged, and ultimately affecting every owner. More Than Strata offers professional strata management services to take the burden away from Owners Corporations. If you’d like help, contact us today and find out what we can do.
