Strata insurance premiums vary, depending on the level of risk exposure of the area where the building is located (Insurance council of Australia, Strata Owners’ Fact Sheet, 2018)
According to the Insurance Council of Australia, many strata schemes pay around a third of the premiums of an equivalent stand-alone home policy (Strata Community Association, Understanding Stata, 2018)
The number of apartments in Australia is increasing - with a 30.6% rise in apartment approvals predicted in November 2017 (ABC website, “Apartment boom continues as development approvals jump” 2018)
If you own a townhouse, unit, or apartment, and your sharing common space with others, you don’t want to be left to foot the bill if there’s damage to shared parts of the building or items..
Strata insurance protects the building and common areas or facilities, with the premiums paid for by the owner’s corporation.
Strata insurance is a compulsory in every state - so if you’re part of an owners’ corporation in a townhouse, unit, flat, apartment or duplex, the owner’s corporation will need strata insurance.
An insurance broker can arrange strata insurance on behalf of the owners’ corporation.
Strata insurance is a policy designed for residential strata, group and community title properties, body corporates, and strata managers. A strata policy usually covers properties within one building, complex, or block of land. On the other hand, building insurance normally covers individual domestic property that is not part of a strata or body corporate scheme.
Strata insurance will usually cover shared or common property in a strata-managed complex. This will include damages to building fixtures such as pipes, hot water systems, and intercoms. Common property including gardens, lobbies, car parks, pools and stairwells. Public liability will also be covered.
Not all strata insurance are built the same, policies can vary between different insurers and it's important to not assume any inclusions. Generally, your personal contents such as furniture and appliances will not be covered. You might require contents insurance or if your property is for investment and you plan to rent out, additional landlord insurance would be required.
The intent of strata insurance is to cover claims for water damage that is sudden and accidental. Strata insurance can also cover for damages in instances of leaking pipes or perils of a burst.
Public liability under a strata policy insures against the death or injury to a person or damage to property for which the owners' corporation or body corporate could be held legally responsible and required to pay compensation.