Strata Insurance
If you own a unit or an apartment and share common areas with others, you own what is also known as a strata-titled dwelling. The name comes from layers of living spaces stacked one on top of the other like layers of rock strata.
The idea of strata insurance in Australia is a little more than 50 years old. However, the concept is prevalent worldwide. Strata insurance is known by other names in different parts of the world. In Australia, strata insurance is often known as body corporate insurance.
If I Own a Strata-titled Property, Must I Purchase Strata Insurance?
Yes, strata insurance is compulsory in all Australian states and territories. Owners of strata units do not have the option to refuse the insurance cover.
Who Pays the Insurance Premiums for Strata Insurance?
The premiums for strata cover on a building are divided amongst the owners of individual units. Generally, most premiums for strata cover cost less than the premiums collected on insurance cover for a stand-alone dwelling. According to a report from the Insurance Council of Australia, strata insurance premiums are approximately one-third of the cost of the insurance cover for an equilivant free-standing dwelling.
Can Strata Insurance Benefit Me?
Most individuals who live in strata-titled dwellings find that sharing the cost of the premiums as well as the liability for issues with others is a benefit. You also have the peace of mind knowing the correct insurance cover is in place should an unforeseen event take place.
What Will a Strata Insurance Policy Cover?
Strata insurance will cover public liability and pay claims of those injured on the property.
Although policies may vary depending on specifics of your area or dwelling, strata insurance may typically cover:
- The building
- Contents
- Shared common spaces
- Lifts
- Wiring
- Car parks
- Swimming pools
- Gardens
- Ceilings
- Floors
- Ducted air conditioning units
- Equipment, fixtures, carpeting, and furnishings located in common areas
It is essential to consult your insurance professional to learn the details regarding what your strata policy covers.
What Are Some Customary Strata Insurance Cover Exclusions?
While your policy may contain specific exclusions that pertain only to your area, most strata insurance will not cover:
- Your personal belongings within your unit
- Asbestos and asbestos-related problems
- Erosion
- Property fencing
What Are Some Optional Add-ons Available for Strata Insurance?
It is best to speak with one of our insurance experts to find out exactly what add-ons are available. However, some typical add-ons include:
- Fidelity Guarantee – Covers losses caused by the misuse of the owner’s corporation funds
- Electrical and Mechanical Breakdowns – Pays if the breakdown in question was a result of a loss
- Office Bearer’s Liability – Protects office bearers from legal action due to another office bearer’s inappropriate actions
- Voluntary Workers’ Personal Accident Cover – Pays for losses incurred by a worker volunteering on behalf of the property owner
Case Study
A strong storm tore a portion of the roof from an apartment complex. A significant amount of rain entered the apartment building, causing electrical failure. Since the building had additional protection from the electrical and mechanical breakdown add-on, the strata insurance will pay for repairs to the electrical system.
*Please Note* The materials presented here are for informational use only. This information is not intended to replace a consultation with an insurance professional and does not constitute legally binding advice.
Commercial Strata Insurance
Business owners need to be aware that strata insurance is compulsory across Australia. If your business is a part of commercial strata, be sure to take the necessary steps to ensure that you are appropriately covered.
What is Commercial Strata Insurance?
Similar to residential strata insurance cover, commercial strata insurance protects business owners who operate in a divided building under a strata title. Commercial strata insurance covers the common areas of the building that houses your company.
What Are the Different Kinds of Commercial Strata Insurance?
There are a number of specific types of cover that can be a part of your commercial strata insurance. Here are three of the most common kinds. You should consult your insurance professional to discuss all of the options available to you.
- Building and Common Contents – This is the basic commercial strata cover and will guard against physical loss or damage to common contents and the physical building.
- Legal Liability – If you are found legally liable to pay because of personal injury or property damage, your commercial strata cover can help if you have legal liability as part of your policy.
- Machinery Breakdown – This typically refers to malfunction of lifts, mechanical machinery, boilers, electrical machinery, and other equipment covered under your policy
Facts About Mixed-use Strata Insurance
When a property combines residential and commercial use, it is essential to address the needs of all building occupants within a mixed strata insurance policy.
How is Mixed Strata Insurance Different From Other Kinds of Strata Cover?
Generally speaking, insurance cover for mixed strata combines the necessary elements of each individual type of insurance.
What Will a Mixed Strata Insurance Policy Cover?
A mixed-use strata policy will cover the common areas of the building for the residential and commercial standpoints. Additionally, a mixed strata policy is suitable for residential retail as well as commercial retail and mixed commercial properties.
A mixed strata building and common contents policy typically provide the minimal cover for losses to the physical building and shared contents. There are various options to customise your mixed-use strata insurance. Consult with your insurance professional to find out the best choices for you.
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