This article about your strata insurance policy has been supplied by Tyrone Shandiman, Strata Insurance Solutions.
The short answer is no. It is a common misconception that unit owners only need a strata insurance policy to cover their insurance needs.
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Strata legislation in different states places responsibility on the owners corporation to insure building & common areas to full replacement value. We always recommended owners take out their own insurance policy whether it be a “landlords” or “contents” insurance policy for residential properties or a “commercial policy” for commercial properties.
Below we provide examples of items not covered by a strata policy:
- Public liability cover under a strata policy is limited to claims made against the owners corporation and often only covers common areas. Liability claims brought against an individual owner for a matter contained to a specific lot is not usually a matter for the owners corporation and therefore not covered by Strata Insurance.
As an example, if a tenant within a unit was electrocuted due to a fault that had not been fixed by a lot owner, despite knowing about the problem, as the claim happened within a specific lot, the strata insurance policy would not likely respond. The policy would only respond to claims made against the owners corporation and the owner would need to refer a claim to their contents or liability insurer.
- The owners corporation does not have responsibility to insure carpets, curtains & floating floor boards as part of the building. This means responsibility to insure these items is placed on the lot owner through a separate contents insurance policy. Subsequently, loss of rent claims caused only by lot owners contents (such as carpets, curtains & floating floor boards) are also not covered under the loss of rent section of a strata policy.
- Different states legislate what is covered under a strata insurance policy, for example paint and wall paper is not covered for properties in NSW and Air-conditioning units are not covered in QLD. A policy held by a lot owner would cover these items as contents. Read about the recent changes to insurance legislation in NSW after the new strata laws have been introduced.
Just like any other form of insurance, exclusions, terms and conditions will apply to all policies and it is important an owner understands what is and is not covered by an insurance policy.
If you are unsure about your requirements to insure your property, contact Strata Insurance Solutions for advice about your insurance needs.
Strata Insurance Solutions
Telephone 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.
For more information about your strata insurance policy, other details concerning strata insurance or information about strata living in your state or territory, visit our FactSheets: Strata Insurance OR Strata FactSheets by State.