If we appoint a licensed Strata Manager, is our owners corporation covered for Fidelity Insurance by the NSW Government, or is this something we have to take out separately?
Does an owners corporation in NSW managed by a Strata Management Agency need Fidelity Insurance as part of their Policy? Our Strata Manager has informed us that as they are a licensed Manager, we are covered by the NSW Government. The Dept of Fair Trading says this is correct per Part 5 Insurance of the Strata Schemes Management Act 2015.
If this is correct, then why would every insurance quote include Fidelity Insurance, with different amounts for different insurers every year?
In NSW, the Property Services Compensation Fund assists people who are out of pocket because a strata manager has failed to account for owners corporation funds held in trust.
Fidelity insurance covers embezzlement, theft, misappropriation, conversion or fraud relating to the owners corporation funds and assets (such as money held in bank accounts).
There is no requirement under the Strata Schemes Management Act to take out Fidelity cover, notwithstanding, most insurers offer this cover as an automatic benefit and there is no premium reduction for removing the cover.
In NSW, the Property Services Compensation Fund assists people who are out of pocket because a strata manager has failed to account for owners corporation funds held in trust.
Premiums reflect claims that an insurer incurs and for most strata insurance policies, the premium is either very negligible or there is no charge imposed by the insurer at all.
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.
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Tyrone Shandiman is a seasoned professional in the insurance industry having embarked on his journey in 2004 within the financial services sector. In 2011, he established Strata Insurance Solutions, transforming a garage startup into a reputable firm servicing over 900 clients with a dedicated focus on strata insurance. Tyrone's role extends beyond managing operations and tackling complex insurance matters; he also founded the Australian Consumers Insurance Lobby, championing consumer rights within the insurance industry. Notably, his efforts and expertise have been acknowledged with numerous industry awards. Adding to these accolades, Strata Insurance Solutions was recently named an Australian Top Brokerage by Insurance Business Australia Magazine, a testament to the firm's excellence and leadership in the field. Tyrone is a regular contributor to LookUpStrata.
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