In a strata-managed complex, owners’ corporation, or body corporate-managed complex, strata insurance covers shared or common property.
External features such as balconies, common-area gardens and barbeques, pools and tennis courts, intercoms, and garages are typically covered. It could also cover anyone working on behalf of the stratum on the premises.
Strata insurance premiums are paid jointly by the owners of property titles and are frequently included in strata fees and levies.
It’s important to note that strata legislation and strata insurance differ from one state to the next. Paint and wall paper are not covered by strata in NSW, while air conditioning units are not covered in Queensland. As a result, it’s a good idea to do some research to find out what your state’s statute covers.
What does strata building insurance cover in NSW?
All OwnersCorporations of a Strata Scheme must insure the building and keep it protected under a contract of insurance against fire, lightning, explosion, and any other occurrence stated in the policy, according to the Strata Act in NSW. This type of insurance also covers common property, which in many cases would include things like gardens, driveways, parking lots, and pools.
For the purposes of a strata scheme, a ‘building’ is defined as the structure depicted on the Strata Plan. The insurance also covers the things listed in the Strata Schemes Management Act 2015 as requiring coverage.
The roof and its roofcavity, which are represented in a thick black line, are considered common property (structure) and are protected as part of the ‘Building Sum Insured.’ The building insurance would also cover anything labeled ‘CP’ (Common Property).
- Infrastructure such as wire and service pipes located in common area spaces are often considered common property. Damage caused by leaking or burst pipes within common walls – infrastructure such as wiring and service pipes found in common area spaces are typically considered common property.
- Glass shattering due to unintentional collision – rocks thrown up, doors slammed shut, etc.
- Graffiti and theft are unfortunately prevalent causes of malicious damage to shared property.
- Fire, while not as common as other causes, has the ability to cause significant property damage.
It’s crucial to know as a strata owner that some insurance carriers may expand coverage to include “Lot Owners Fixtures and Additions.” This means that if an insurable incident damages those permanent fixtures within a Lot, they will be covered.
These objects are normally excluded from coverage in your contents/landlords insurance if they are already protected under the Owners Corporation’sinsurance policy, but owners should verify with theircontents insurer to be sure.
CHU Insurance (2019) includes the diagram below in their Contents Fact Sheet to show what is and is not covered by their strata insurance policy:
As a result, double-check that your Owners Corporation’s coverage covers LotOwners Fixtures and Additions.
Despite the fact that an item would ordinarily be protected by the Owners Corporation’sinsurance policy, owners should keep the following in mind:-
- There is no bylaw in the complex that assigns accountability for the item to the unit owner.
- The installation has received the necessary approvals, such as from the City Council and/or the Owners Corporation.
An Owners Corporation is required by the Strata Schemes Management Regulation 2016 to have Public Liability Coverage of at least $20 million.
This will protect the Owners Corporation in the event of an incident on common property that results in injury to a person or property.
- Owner Investors Those who rent out their lot will be covered for any lost rent (up to the policy limit) if their lot is damaged by an insurable event and the insurer determines it is unusable. The insurance pays the owner the amount of rent that the tenant would typically pay, and the renter will use that money to support alternate housing rather than paying the owner.
- Owner-occupiers These are people who own their own homes. If an insurable occurrence renders a Lot unusable, the owner-occupier will be paid market rent to rent out their property and utilize the proceeds to pay for substitute lodging while the property is being repaired.
Until the lot is no longer uninhabitable, the amount of lost rent will be paid to the owner in accordance with the policy’s amount. The standard amount of coverage is 15% of the building’s insured value. For example, if the building is insured for $3,000,000, there will be $450,000 in loss of rent coverage per claim.
It’s vital to remember that the tenant’s fees or losses incurred as a result of having to vacate the premises are usually not compensated.
This protects anyone who volunteers to labor on behalf of the Owners Corporation and is wounded while doing so. If owners want to do unpaid work, they should contact the strata manager so that we can put a note on the policy with the insurer.
This sort of insurance covers the Owners Corporation for any losses incurred as a result of a wrongful conduct committed by a member of the Strata Committee while performing their duties.
Hopefully, this post has answered some of your Strata Insurance-related questions.
Note that this is only general guidance; if you have any specific questions, we will gladly seek clarification from your strata building insurer.
What does strata insurance usually cover?
A strata insurance coverage typically covers homes inside a single building, complex, or parcel of land. The building(s), parking, and other common spaces inside the lot or complex are usually covered by these policies.
What does strata fees cover NSW?
The strata fees effectively cover everything necessary to keep your property and building in excellent working order for the tenant. Maintenance, insurance, management fees, repairs, and utility upkeep are all charges that the management is responsible for.
What does strata management cover?
Shared ownership of common property, as well as shared responsibility for its management and repair, is a feature of strata title management.
Property owners and strata committees have a responsibility to perform a variety of tasks related to their strata property, including maintaining common areas, collecting levies and fees, holding regular owners corporation meetings, including an AGM once a year, maintaining adequate building insurance, and keeping proper records and documentation.
While hiring a professional strata manager isn’t required in Australia, it can be a smart option if your strata committee, body corporate, or owners corporation lacks the time, resources, or competence to conduct the job properly. If a strata property isn’t managed effectively, it might have a variety of undesirable consequences.
What is not covered by strata insurance?
Strata insurance does not cover personal property or items that are not permanently attached to the structure. Internal fittings and fixtures, lighting, carpets, flooring, furniture, electrical devices, jewelry, and other personal belongings are examples of items that aren’t covered by strata insurance.
If you rent out your home, bear in mind that strata insurance does not cover tenant theft or interior damage, legal fees incurred as a result of pursuing legal action against tenants, or loss of rent if a tenant fails to pay.
You can purchase contents insurance or landlord insurance to safeguard your goods from loss, theft, or damage, as well as to protect yourself from any problems with your tenants.
Does strata insurance cover accidental damage?
If you own a residential unit or flat, you’re probably already paying Strata Insurance as part of your Body Corporate charge. Here are some basic facts concerning this form of insurance that you may not be aware of.
If an apartment, townhouse, or flat includes shared access or common amenities, it’s likely that a Body Corporate oversees their upkeep. Body Corporates will pay an annual fee for Residential Strata Insurance to protect common areas if they are destroyed. The cost is split among unit owners and is included in the Body Corporate fee that owners pay each year.
For apartment buildings or flat complexes, strata insurance covers the common or shared property. Residential Strata insurance covers the communal areas as well as the building itself, including gardens, lifts, car parks, balconies, pools, spas, and even tennis courts. Typical risks covered by such plans include fire, earthquakes, storm and water damage, accidental damage by tenants, tenant injuries, theft, floods, and more. These policies can also be expanded to include:
Every corporation and insurance firm is unique. Many owners believe that because their apartments are deemed to be part of the building as a whole, they are insured for damages to the windows, ceilings, floors, and floor coverings in their flats. This isn’t always the case, though. Certain property features may be excluded from the Strata Insurance coverage, and it does not cover contents or personal things. When it comes to Public Liability and lot owners Fixtures, Fittings, and General Contents, it pays to think of this type of insurance ending at the entry door to each individual unit (furniture, appliances etc.) This is especially important if the unit or flat is occupied by a renter, since they may require supplementary Landlords Insurance coverage for loss of rent, rent default, and malicious damage by tenants. In addition to Residential Strata insurance, owners will need to assess their own personal circumstances to determine which insurance(s) they may require to protect themselves.
Every five years, the Body Corporate Committee should request to have the complex or apartment building valued, and the Strata Insurance policy should be evaluated every year. Because older buildings require more care and repairs, inflationary costs must be included in.
The insurance coverage must fully cover the property’s demands and be covered for the correct amount, according to the Body Corporate Committee. You don’t want to be caught off guard in the case of a fire or flood by underinsuring or failing to check your policy. You will not need to acquire more than one insurance because it will cover several properties or units within the building.
6. Where can you get Strata Insurance?
Residential Strata Insurance is a typical type of insurance for Body Corporates, and several companies provide it. Using an insurance broker is generally a smart idea because they may design a program to the demands of the building or negotiate lower premiums.
Does strata insurance cover internal walls?
Common property such as common areas, car parks, stairwells, lifts, gardens, and common floors, walls, and ceilings are all covered by strata insurance.
What is Strata insurance Australia?
Damage to strata properties such as apartments and townhouses, as well as shared property such as stairwells and driveways, is covered by strata insurance. It offers coverage for lost rent and interim housing for unit owners if the property is unable to be occupied due to an insured event.
Is water included in strata?
The types of utilities that are included in the monthly condo fee vary by building. Water and trash are usually included in most rates; but, in some buildings, heat and electricity may be included as well.
If water is covered, for example, running a tap, taking a shower, and filling a glass would all be “free” once a month. However, don’t take this as permission to go crazy with your water consumption. Although you may not receive a monthly water bill, your apartment building does. If utility usage exceeds expectations, condo rates may be raised to compensate.
Keep in mind that the more utilities you have covered, the higher your condo costs will be. Always confirm what utilities are covered by your condo fees with your real estate agent and the property listing when buying a condo. Hydro (electricity), heating, and cable TV are some of the other utilities that may or may not be provided. If you or your agent are ever unsure about a listing’s information or wish to double-check it, you can contact the condo board or property management company.