From the very beginning strata insurance undoubtedly seems convoluted. However, strata and related policies do not have to be complicated.
Strata is created to shield certain types of properties. There are many crucial differences in acquiring a strata policy in comparison with a building insurance policy, or landlords and contents insurance.
What is a strata insurance policy?
So, what is the definition of residential strata insurance? Residential strata is a policy that covers residential strata or community titles. The premium expenses of strata policies are usually divided between the strata units as part of their general strata costs.
Strata policy is a lawful requirement in properties of this kind, and the insurance must also offer public liability that protects individuals injured on common property. Every state and territory has its own specific legislative requirements for policies associated with strata policy. The strata policy is responsible for insuring the property and making sure that the policy meets the legislative needs.
What is covered by this insurance policy?
Strata insurance covers a wide range of accidents that can happen on a property. What is and is not covered will be dependent on the nature of the policy taken out. However, most policies will cover some or all of the following:
- Damage caused to the common property as defined on the title to the property.
- Some repaired parts of the unit, like air conditioning.
- Shared contents of the property that is not the owner’s assets.
- Short accommodation for an owner if the unit is hurt.
- Public liability.
- Fidelity cover.
- In sum, strata insurance is established to cover all common elements of a strata building or property.
The following list outlines usually admitted strata insurance claims:
- Fire (including bushfires)
- Malicious acts of vandalism
- Theft and burglary
- Damage by an animal
- Riot, civil commotion, or public disturbance
- Escape of liquid
- Earthquake and tsunami
Things that aren’t covered by strata insurance
Like any type of insurance, strata can impose exclusions on coverage. Especially, some plans do not contain coverage for flooding. Remember that strata does not cover personal assets, and any inhabitant will need a separate policy to protect their contents.
Who manages strata policies?
The strata is usually handled by the strata manager that has been selected to manage the policy and cost on behalf of all the owners. Strata manager, community manager, and body corporate manager are expressions employed interchangeably.
It is also suggested that the Body Corporate apply to get the complex or apartment building assessed at least once every three years to make sure the building is sufficiently covered. The valuation should correspond with annual reviews of the policy.
Inhabitants of strata buildings may also choose to buy contents insurance. Similarly, landlords may select to purchase landlords insurance on strata properties that they own.
How does strata policy work?
Let’s now talk about how it works when it comes time to execute a strata policy.
Juxtapose strata policies between companies.
Strata data can assist your body corporate to find the right cover for your strata building and make sure you are matched with a policy that best covers the specific nature of your property.
Choose a policy
Strata policy is obligatory in some countries like Australia, and South Australia has specific rules compared to other states. Strata Data will guarantee your policy covers the areas it needs to.
Paying the premium
The strata manager must make sure that insurance fees are paid when they are due.
Claims are made to the insurance company in the case of theft, damage, etc.
In this instance, it’s essential to keep in mind that insurance companies will not insure matters that arise from known flaws. It is, therefore, necessary to keep your building in good condition.
Differences between building insurance, contents insurance, and strata insurance
Answering “what is strata insurance?” can become more baffling when as a unit owner, you have to determine the difference between building insurance, contents insurance, and strata.
Insurers or other professionals may use these terms in analogous circumstances, but all convey different meanings considering what is really covered by each insurance policy.
Building insurance applies to the cover of permanent structures such as a free-standing home. If you own strata property then typically, there is no need to purchase building insurance. However, if you own land in a community division, then it is probable that you will need to take out your own separate building insurance.
Contents insurance applies to anything within the unit that is owned individually and not attached to the property. Furniture, clothes, artwork, and electronics are all protected by contents insurance. None of these are covered under strata policies, so it is vital you obtain this personally to protect your personal assets.