As a property owner or investor, it is crucial to understand the difference between strata insurance and building insurance policies. Many people often assume they are the same when in reality; they serve different purposes.
In this post, we will explore what strata insurance and building insurance entail, their differences, and why having both policies could be essential for your peace of mind as a property owner.
Table of Contents
What is Strata Insurance?
Strata insurance is a type of insurance which besides buildings also covers the common areas of a strata scheme It also covers liabilities to third parties. It is different from building insurance, which covers the physical structure of the buildings only.
Common areas can include things like pools, gyms, and gardens.
What is Building Insurance?
Building insurance is a type of insurance that covers the physical structure of a building, as well as any permanent fixtures and fittings. This can include things like the roof, walls, windows, doors, and floors. It also covers any outbuildings on the property, such as sheds or garages.
Building insurance may not cover the contents of a property, which are usually covered by contents insurance.
Do You Need Strata and Building Insurance?
Strata insurance and building insurance are two different types of insurance that serve different purposes. Strata insurance covers the common areas of a strata property, such as the lobby, hallways, and recreational facilities.
Building insurance covers the physical structure of the building itself. You may need both types of insurance if you own a unit in a strata property. Local legislation requires minimum coverage for strata properties, all of which are covered by strata insurance, but not all of which are covered by building insurance.
Consider Getting Strata and Building Insurance?
If you live in a strata property, it’s important that you understand the difference between strata insurance and building insurance.
While they both protect your investment, they cover different things. Strata insurance covers the common areas and shared facilities of your building, while building insurance covers the structure of the buildings and your personal contents.
Most strata schemes will have a compulsory requirement for owners to take out both types of insurance. However, there are some instances when it may make sense to take out both policies with the same insurer.
This is usually when the cover provided by each policy complements the other, providing you with a more comprehensive level of protection.
When considering taking out strata and building insurance together, there are a few things you need to keep in mind.
First, you need to make sure that both policies provide adequate cover for your needs.
Second, you need to compare the cost of the premiums to make sure you’re getting value for money. And finally, you need to check that there are no exclusions or excesses that would leave you out of pocket in the event of a claim.
If you’re unsure about whether taking out both types of insurance is right for you, speak to your strata manager or an experienced strata insurance broker who can help assess your individual needs.
How to Compare Strata and Building Insurance Policies
Strata insurance and building insurance are not the same. Strata insurance is insurance that is taken out by the owners corporation of a strata scheme, and it covers the common property in the scheme.
Building insurance is insurance that is taken out by the owner of a building, and it covers the physical structure of the building.
When comparing strata and building insurance policies, there are a few things to keep in mind.
First, strata insurance typically covers more than just the physical structure of the building - it also covers things like common area fixtures and fittings, as well as liability for injury or damage caused by the common property.
Second, strata insurance premiums are usually paid by the owners corporation, whereas building insurance premiums are usually paid by the individual unit owners.
Finally, it's important to check what each policy covers and excludes before making a decision - some policies may cover certain risks but exclude others.
Key Differences Between Strata and Building Insurance
There are a few key differences between strata and building insurance that you should be aware of. For one, strata insurance is typically required by law for any property that is part of a strata title scheme, whereas building insurance is not always legally required.
Additionally, strata insurance usually covers the common areas of a strata property (e.g. hallways, lobbies, recreational facilities, etc.), while building insurance generally only covers the physical structure of the building itself.
Finally, strata insurance typically includes liability coverage for things like personal injury or damage to another unit owner’s property, while this kind of coverage is often optional with building insurance.
Conclusion
Strata insurance and building insurance are two very different types of insurance. While both provide coverage for property damage, strata insurance is more specific in that it provides coverage for common areas shared by tenants within a multi-dwelling unit.
Building Insurance on the other hand covers any physical structures like walls, floors and ceilings which exist on a premises. It's important to understand each type of policy before making any decisions so you can ensure your property is properly protected.
Get a strata insurance quote and talk with our strata insurance specialists who can tailor cover to suit your needs. We can help you determine what factors could save you on strata insurance premiums such as the kind of building to be insured, where the location is and the amount of common property shared.