The strata insurance industry in Australia is an integral part of the property and home insurance market. The term "strata" refers to buildings with multiple owners, such as apartments, townhouses, and other similar dwellings.
Strata insurance protects against risks associated with shared ownership of real estate and can include cover for damage or destruction of common areas, building repair or replacement costs, legal liability claims, and more.
In this article, we’ll explain why strata insurance is so important in Australia and how it helps protect property owners from many financial pitfalls. Read on to learn more about why strata insurance might be worth investing in.
Table of Contents
What is Strata Insurance?
Strata insurance is a type of insurance specifically designed for strata titled properties, such as apartments and townhouses.
It covers the building itself and common areas, such as hallways and lobbies. Strata insurance is important in Australia because it helps protect owners from financial loss if their property is damaged or destroyed.
It also helps to cover the costs of repairs or rebuilding, and any legal liability for injury or damage to third parties.
Why Do I Need Strata Insurance?
Strata insurance is a legal requirement, so it’s important to check with your strata manager or body corporate before making any decisions about how to insure your property.
In most cases, strata insurance will be far more comprehensive and cost-effective than individual policies taken out by unit owners, and such policies may not cover all the legal requirements set by your state.
Strata insurance is important in Australia because it protects the owners corporation, and individual unit owners, from a range of risks.
These risks can include damage to the common property, legal liability for personal injury or property damage, and loss of rent if the property is uninhabitable.
What Does Strata Insurance Generally Not Cover?
There are a number of things that strata insurance generally does not cover. These include:
Wear and tear
Known risks which have not been addressed (for example a leak which has not been repaired for some time)
Building defects
How To Get Strata Insurance
There are several steps you can follow to get strata insurance in Australia:
Assess the insurance requirements for your strata scheme. Take into account the shared assets and property types, their values, and any potential liability exposures the strata plan may have.
Compare prices from several insurance providers to obtain the greatest coverage at the lowest cost. Shop around.
Study the policy thoroughly and make sure you comprehend the policy's coverage, including any exclusions or limits. If you’re not sure speak with an insurance broker. When you've found a policy that suits your needs, you can buy it directly from the insurance provider or through a broker.
Keep the policy up to date. Regularly review and renew your strata insurance coverage to make sure it still meets the demands of your strata scheme.
You might need to coordinate with the other owners in your strata scheme to get coverage since it is often the owners company's (sometimes referred to as the strata corporation) responsibility to set up and pay for strata insurance.
It's also vital to keep in mind that in Australia, strata insurance is often mandated by law, so you should make sure your strata scheme is adequately protected.
Conclusion
Strata insurance is important in Australia because it provides coverage for damages to common property and assets in a strata scheme, which is a form of multi-unit property development that is common in Australia.
Strata insurance can protect the owners of units in a strata scheme from financial losses due to damage to common areas or assets, such as roofs, walls, elevators, and shared facilities. It can also provide liability coverage for injuries that occur on the common property.
Strata insurance is typically required by law in Australia, and it is usually the responsibility of the owners corporation (also known as the strata corporation) to arrange and pay for this insurance.
Get in touch with our strata insurance specialists and they can create a plan that meets your needs. We can assist you in identifying factors that could lower your strata insurance prices, such as the type of building that needs protection, the location, and the quantity of shared common property.