March 10th, 2017
Whether you live in or rent out a strata property, there are three insurance policies you need to consider, including strata insurance, contents insurance and landlord insurance.
They all cover different aspects of your property and what you have in it, so it’s important to compare the differences between them. This way, you’ll know which insurance to take out, and you can ensure that you’re covered if the worst happens.
If you’re confused about which insurance policy you need, don’t worry! We’ve put together this comparative guide to strata, contents and landlord’s insurance to help you choose the right insurance for you.
Strata insurance
What is strata insurance?
As a lot owner, strata insurance protects you and your property, and is mandatory. It provides general insurance cover for the building, common property and common contents managed by the Owners Corporation. Strata insurance will help pay for the cost of repairing and rebuilding common property in the event of a natural disaster.
What it covers
Strata insurance covers the following:
- Common property, e.g. common areas, lifts, stairwells, car parks, pools, gardens, windows, floors, walls and ceilings
- Common contents, e.g. appliances, furniture, fittings, equipment, carpets and works of art in common areas
- Material damage to structural fixtures (e.g. fixed plant, machinery and underground services) due to an insured peril
- Lot owners’ fixtures, fittings and improvements that form part of the building, e.g. balconies, ducted air conditioning, electrical conduits/wiring, water and sewage pipes, stovetops, built-in ovens, kitchen cupboards, baths, showers and hand basins
- Reinstatement and replacement insurance for buildings on common property
- Public liability insurance for common property to protect lot owners in the event of any property damage/loss and injury, illness or death of a person on common property
- Voluntary workers insurance (a form of personal accident cover) to provide compensation to people who get into an accident while carrying out voluntary works on behalf of the Owners Corporation
- Loss of rent or alternative accommodation due to an insured peril.
What it doesn’t cover
Strata insurance doesn’t cover contents inside individual apartments, like personal items, blinds, curtains, carpets, light fittings and electrical appliances that aren’t wired into the premises. Some policies don’t cover certain risks, e.g. landslides or floods, or certain property features such as fencing.
Factors that contribute to the premium
Common factors that contribute to the premium are:
- Compulsory requirements of state-based law
- Stamp duty and GST
- The building’s age, condition and replacement cost
- The location’s risk profile
- The claims history of the strata property
- The property’s vulnerability to insured events, e.g. age, building design, materials and building codes
- Commercial activities carried out on the premises, e.g. holiday letting
- Agent fees and commissions
- The level of excess payment chosen by the Owners Corporation, payable at the time of a claim
- Common property costs, e.g. stairwells, lifts, car parks, pools and fire protection systems.
The premium costs are usually shared amongst the lot owners as part of their strata fees and levies.
Why the Owners Corporation should get a property valuation
According to the law, buildings must be insured for full replacement and reinstatement value. So, the Owners Corporation should obtain a professional property valuation on a regular basis, such as every 3 years.
Why strata insurance is more expensive in some areas
In cyclone-prone areas, for example, the risks to a property are greater, making it more expensive to insure than a property in a less-hazardous area. Even buildings constructed to cyclone building codes are expensive to insure, as they can still experience considerable damage during a cyclone. Moreover, property features like car parks and pools can be very expensive to repair.
Contents insurance
What is contents insurance?
Contents insurance protects your personal assets from accidental loss or damage. If you’re an owner occupier or tenant living in a strata property, you’ll need to take out contents insurance. It’ll help pay for the cost of repairing or replacing your personal possessions and furnishings.
Gain peace of mind that your valuables are secure with Contents Insurance from CHU – our preferred insurance provider. Get a free online quote.
What it covers
Contents insurance covers household items that belong to you and to your family members who live with you. It covers tangible assets and items that don’t form part of the building structure, such as:
- Clothes
- Jewellery
- Cameras
- Mobile phones
- Sports gear and equipment
- Toys
- Furniture
- White goods
- TV and stereo
- Collections (CDs, DVDs, books, stamps, etc.) and other special items
- Computers and other electrical appliances
- Blinds or curtains
- Light fittings
- Internal carpets.
Contents insurance also provides protection for legal liability you may incur to third parties for personal injury or damage to property.
What it doesn’t cover
Contents insurance doesn’t cover items permanently attached to the building and personal items that are lost or damaged outside of your apartment. It also doesn’t cover items your friends or visitors bring into your apartment.
Landlord insurance
What is landlord insurance?
Landlord insurance protects you against tenant-related losses and damages, such as loss of rent due to tenant default, or if your contents are stolen or damaged by tenants. If you’re a strata property owner and you rent out the property, you’ll need to purchase landlord insurance. It will help pay for the rent, the cost of repairing or replacing stolen or damaged contents, and more.
Keep your property covered in the event of the unexpected with Landlords Insurance from CHU – our preferred insurance provider. Get a free online quote.
What it covers
Landlord insurance covers the following:
- Landlord’s contents, e.g. internal carpets, furniture, blinds, light fittings, and other fixtures & fittings
- Damage or theft caused by tenants or their guests
- Damage caused by pets of tenants
- Malicious damage to both contents and building
- Loss of rent due to theft or damage caused by tenants
- Loss of rent due to tenant default or tenant eviction by court order
- Loss of rent due to death of sole tenant or failure to find a new tenant
- Loss of rent due to absconding tenants or tenants obtaining a hardship order
- Loss of rent due to prevention of access to property or failure to give vacant possession
- Loss of rent due to insured events
- Re-letting expenses, removal of goods, change of locks, and representation costs following a claim on loss of rent
- Professional tax audit fees and legal costs related to tenant eviction by court order
- Public liability for your capacity as a landlord.
What it doesn’t cover
Landlord insurance doesn’t cover the personal possessions and furnishings of owner occupiers and tenants living in a strata property.
Need insurance?
Strata Data offers strata insurance and landlord’s insurance. We use various insurers to help you find the policy that best suits your needs, and at a competitive rate too. Our friendly and experienced staff will help you arrange your insurance and handle the claims process for you with ease and efficiency. You can rest assured that you’ll get the best possible settlement.Request an insurance quote now.
