Commercial and residential strata insurances have coverage for specific insurance needs of unit owners as well as offices. Owners Corporation or Body Corporate is issued commercial and residential strata insurance under the supervision of strata consultants. Each property owner corporation has the obligation for taking out strata insurance for covering the building, and common area elements along with the additional legal liability.
As under the strata legislation of each state, holding strata insurance is a compulsion. Owners corporations and strata managers or strata consultants are liable to obtain the right advice regarding the available coverage suitable for specific requirements. Although a few strata policies are meeting the minimum legislative requirements yet they are not always sufficing the owners with the added protection needed. According to the strata consultants, a range of strata policies prevails which can be customized for each complex.
How Do the Strata Consultants Explain Strata Insurance?
The Strata Insurance Policy is meant for covering the Owner for the loss or damage a building and its common contents encounter. Added to it, Strata Insurance indemnifies the owners’ corporation for personal injury or third-party property damage taking place on the premises.
Maybe you are a Strata Administrator, a Strata Owner, or a Council Member – your Strata Consultant will always instruct you to keep your investment protected and avoid the risks likely to affect the residential and commercial strata.
What Are Covered By The Strata Insurance Coverage?
Strata Insurance keeps the building protected along with the common or shared property. It even includes the owner’s corporation’s contents. The insurance cover type and cost vary based on the location and the amount of shared common property. The minimum insurance amount needed for an owner’s corporation is Reinstatement or replacement insurance. All Owners Corporations, apart from the two-lot subdivisions have to purchase reinstatement or replacement insurance for all buildings which belong to the common properrty.
The Strata Insurance Covers –
- Shared services
- Services and structures replacements, like fences or driveways
- Repairing, replacement and reconstruction of damaged property
- Demolishing cost and debris removal cost
- Added costs such as hiring a professional surveyor and architect
Public liability insurance for common property – Owners’ Corporations are covered by public insurance for the responsibility for paying for injuries, illness, death or property loss.
Additional Coverages
Owners Corporation might choose purchasing additional insurance for protecting the lot owners’ rights. Strata Insurance is compulsory and covers the common property and building damages –
- Theft
- Fire
- Storm
- Water Damages
The common areas the Insurance Policy covers are –
- Tennis Courts
- Car Parks
- Garden equipment
- Lifts
- Spa Areas
- Balconies
- Wiring
- Floors
- Walls
- Windows
- Ceilings
Each state is having its requirements with a different policy. The strata consultants can help in explaining the strata insurance for the owner to get the best coverage needs.
- Optional Coverage
- All the common property contents like the paintings and carpets in foyers
- Fidelity guarantee
- Workers’ compensation
- Appeal expenses
- Machinery breakdown
- Office bearer’s legal liability
- Appeal expenses
- Insurance of voluntary workers (personal accident coverage type)
- Catastrophe insurance
- Expenses for legal defence
- Government audit costs
- Lot owner’s improvements to the building
What Are Not Covered By Strata Insurance?
Strata Building Insurance does not cover the Owner’s Corporation for routine maintenance items and building defects, which are repairing the leaking shower trays, cracks within walls and ceilings and concrete cancer. The easiest one to compare is motor vehicle insurance. Even if the car can be insured against an accident, your car cannot be insured against wear and tear – this exact principle applies to Strata Building Insurance.
Contents Insurance of Tenants
Renters should buy the renter’s contents coverage for protecting their possessions while living in their units.
Owner-Occupied Contents (Contents of Unit Owners)
The Strata insurance policy does not contain personal content. For personal property protection and to avoid liability, owners have to get a contents policy.
Contents of Landlords
The landlord policy is the protection of the unit owner’s contents (which are a printer, furniture, printer and more) along with their liability being a landlord.
These are the items not covered under the strata insurance (these vary according to the strata laws in each territory or state) –
- Elements are defined as having common contents
- Curtains, blinds and carpets
- Wallpaper, tiles and paints
- Fixed floor coverings and ceilings
- Plants, shrubs, hedges and trees
- Potable or inflatable swimming pools
- Installed timer floor during construction
- Buildings at present under construction
- Temporary buildings, like caravans, mobile structures and houseboats.
What Are the Chief Areas of Focus for Strata Insurance To Clarify the Correct Building Replacement Value?
A property has to be compulsorily valued when it is to be replaced for ensuring the insurer fully pays the claim – as instructed by the strata consultants. Now for keeping the property’s value current, the strata consultants recommend taking up professional insurance replacement cost valuation every three years.
We shall end the discussion by pointing out why to consult the strata consultants. Since the strata consultants are the experts in the niche, they ensure working closely with their clients, that is the Owners and can understand all of their unique needs. At the same time, they even review the coverage annually to ensure it is correctly covering the whole situation.
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