Do you live in an apartment? Here's what's covered under strata insurance

If you currently own, or are considering purchasing a unit, you will have been advised that strata insurance is mandatory to pay. Homeowners and would-be buyers should familiarise themselves with exactly what is covered under strata insurance to mitigate the risk of gaps in your personal insurance coverage.

Strata insurance is insurance paid to the body corporate of a building. As previously stated, it is mandatory, with each state and territory providing different legislative requirements for the strata insurance. Each property owner within the strata building will generally split the cost as part of your strata fees.

It’s important that you understand what exactly is covered by strata insurance so that you do not risk being underinsured in your personal insurance coverage.

What is covered under strata insurance?

Residential strata insurance can provide coverage for apartments, townhouses, and units. In the event of loss or damage, strata insurance typically covers:

• Common area contents - including shared outdoor furniture, gym equipment
• Building fixtures - including intercoms, air-conditioning and pipes
• Shared property - including gardens, car parks, pools, lobbies and stairwells
• Public liability insurancecovering common property

Common areas in these instances may refer to recreational areas, pools or gyms. Permanent fixtures may refer to anything from doors and ducted air-conditioning to hallway decor. Shared property can refer to sealed driveways and stairwells. However, the list of exactly what an insurer may cover here can vary depending on the provider.

For some insurers, coverage may also include additional benefits in the event of loss and damages, including removal of damage and debris, temporary accommodation, and loss of rent.

Just as different risk factors can impact the premiums for home or even comprehensive car insurance, there are several factors that can contribute to the premium of the strata insurance, including:

• The age and condition of the building
• Government taxes on insurance
• Claims history of the strata building
• The risk profile of the suburb
• Commercial activities, such as holiday rental arrangements
• The cost of the common area contents, building fixtures and shared property

What isn’t covered under strata insurance?

Strata insurance does not typically cover the belongings inside a property, nor will it offer coverage in the event of loss, theft, or damage to these belongings.

In this instance, it may be worth exploring contents insurance options, as this insurance typically covers your belongings.

There may be other fixtures or materials that you assume would fall under strata insurance as per the above. But it’s worth noting these factors are not typically covered:

1. Lights
2. Internal fittings and fixtures
3. Floorboards and carpets
4. Hot water unit exclusive to your lot

For example, if a strata block of units provides hot water from a gas or electric hot water system in the common area of the building, and this is supplied to the units, this is considered a ‘common hot water system’ and therefore the responsibility of the strata to maintain.

It’s also important to note that strata insurance generally will not cover you in the event of damages specific to landlords. In this instance it may be worth looking into landlord insurance, which could offer coverage benefits like rental income loss, damage to the property and contents, rent default and more.

Regardless of the coverage type you need, it’s crucial that you compare your options to ensure you’re choosing the most competitively priced premium that is relevant for your property and insurance needs.

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