The top 6 things to remember when applying for Strata Insurance.
With the Strata construction industry constantly evolving, and the introduction of new and complex legislation, the role of an insurance broker is more important than ever.
What is Strata Insurance and what does it cover you for? We answer the most common questions we get asked about Strata Insurance every day.
Strata Insurance is designed to protect you and your property as a lot owner. It provides general insurance cover for common property under the management of a strata title or body corporate entity. The premiums for strata insurance are typically shared amongst the lot owners as part of their strata fees and levies.
Holding Strata Insurance is mandatory under each state’s relevant strata legislation. However, each state and territory has different legislative requirements that deal with insurance for strata title properties. You should always check that your insurance meets those legislative requirements. If your property is professionally managed, your Strata Manager will usually arrange this insurance on your behalf.
Strata Insurance policies cover material damage as a result of an insured peril to structural fixtures including fixed plant, machinery and underground services. These policies also provide cover for owners’ fixtures, fittings and improvements which form part of the building. Some of these items may include built-in ovens, stovetops, kitchen cupboards, hand basins, baths and showers. Common Policy Features include:
Strata Insurance specifically excludes contents within individual units such as carpets, curtains, blinds, light fittings and electrical appliances not actually wired into the premises. These items should be insured by your Contents Insurance or Landlord Insurance policy.
In Australia, different states have different statutory requirements for Public Liability Insurance when it comes to Strata properties.
As of November 30, 2016 the minimum liability insurance statutory requirement for NSW Strata property entities increased from $10,000,000 to $20,000,000. Therefore, $20,000,000 is the minimum level of Public Liability Insurance we recommend.
Other states & territories
In all states and territories (excluding NSW) the statutory requirement and minimum level of Public Liability Insurance required for each Strata property entity is $10,000,000. It should be recognised however that the standard liability limits currently offered with domestic home and contents insurance is between $20,000,000 and $30,000,000. Accordingly, we recommend that you always insure for a minimum of $20,000,000 liability.
If you are still unsure and would like to discuss Public Liability Limits for your Strata entity, please call your Whitbread Strata Insurance Broker to ask for advice specific to your situation.
The law requires that buildings are insured for their full replacement and reinstatement value. Whitbread recommend that the Owners Corporation obtain a professional property valuation every three years.
Strata property owners who rent out their property need to purchase Landlord Insurance as a separate policy to the Strata Insurance. Landlord Insurance provides insurance protection for your liability as a Landlord. In addition, the insurance provides protection for Landlord’s contents, loss of rent by an insured peril and various other benefits.
As an owner occupier of a strata property, you should arrange a Contents Insurance policy. This will provide cover for your furniture, personal contents, jewellery, collections and other special items. In addition to this, Contents Insurance policies provide legal liability protection for any damage to third party property or third party injuries that may occur anywhere in Australia.
This insight article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice. Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website
*Typical building contents replacement costs are provided by Sum Insured Pty Ltd (A.B.N. 55 947 630 521 (‘SI’) trading as Home Contents. Whilst every care is taken to ensure the accuracy of the information as a guide for costing, no responsibility is accepted by SI, Steadfast or the Steadfast Broker for its accuracy. Please check with a Valuer or other suitably qualified professional for an accurate estimate. Neither Steadfast nor the Steadfast Broker takes any responsibility for the costs provided by SI, or any liability for the accuracy of or reliance upon or use of, the costs. To the fullest extent permitted by law, SI, Steadfast and the Steadfast Broker expressly disclaim all warranties, express or implied, including, but not limited to, the implied warranty of fitness for a particular purpose. SI, Steadfast and the Steadfast Broker do not warrant or make any representations regarding the use or the results of the use of the information provided in terms of its correctness, accuracy, reliability, or otherwise.
On Friday 4th of May, a burst water main and subsequent serious flooding of the basement at our Sydney office caused significant damage to essential building services.
In order to accurately underwrite a Strata Insurance policy, insurers are requiring a lot more information when placing new business or renewing Strata Insurance policies. Whitbread are Strata Insurance specialists, and can advise you of all the information insurers require.