Are you planning on purchasing a strata title, say a trendy apartment or a cosy inner-city townhouse? Congrats on diving into a unique realm of property ownership with its own rules and responsibilities.
In Australia, one of the many hats you wear as a strata title owner involves home insurance. While it sounds simple enough, understanding strata insurance and how it works can be, well, complicated.
From knowing what the insurance policy for the building you live in covers to making sure you have adequate home and contents insurance for your own individual unit, there’s a lot to unravel.
If you’re ready to learn or are already knee-deep in the experience of home ownership, keep on reading to learn 7 essential tips on understanding home insurance in the world of strata title ownership.
1. Get Familiar With Strata Title Insurance
So, let’s start with the basics. What is strata title insurance anyway? It’s an insurance that covers shared or common property in a strata-managed complex, or an owners’ corporation/ body corporate-managed complex.
Strata insurance covers external areas such as balconies, common-areas such as gardens, barbecues, pools, tennis courts, intercoms, garages and so on. You get the picture. It can also cover anyone working onsite on behalf of strata.
The payment of strata insurance premiums is shared between owners of property titles, and because of that, they’re usually included in your annual strata fees and levies. But one thing to bear in mind is that strata laws and insurance laws are different in each state.
For instance, in New South Wales, strata insurance doesn’t cover paint and wallpaper, whilst in Queensland strata won’t cover air conditioning units. So, it’s always worth looking into what you’re actually covered for under your state’s strata legislation.
2. Know What Your Building’s Insurance Policy Covers (And Doesn’t Cover)
When it comes to home insurance, knowledge is power. This is especially true when it comes to building insurance and individual owners’ insurance coverage. Your building’s insurance policy will often cover structural damage to the building and common areas, however, it may not cover everything.
For example, does the policy cover custom fixtures and fittings within the individual unit? What about coverage for any renovations, fixtures or fittings installed by an individual owner?
These are the types of specifics that are important to understand when choosing your home insurance.
It’s just as important to know what the building’s insurance policy doesn’t cover. Remember that there are certain types of damage or events that are excluded from some building insurance policies.
That means the individual unit owners (ahem you) will need to purchase insurance coverage to fill those gaps. Understanding what is and isn’t covered by the building’s insurance policy is essential to making informed decisions regarding individual owners insurance needs.
3. Assessing Flood and Natural Disaster Coverage
Australia is no stranger to floods, bushfires and storms and Mother Nature can deal out a pretty rough hand, as I’m sure you’re well aware. So, it’s really important to make sure your insurance policy covers you for these risks.
While many standard policies cover events such as fire or storm damage, they often exclude cover for floods for example, which are a major concern in certain areas.
In such cases, you’ll have to purchase additional coverage for flooding or other natural disasters depending on where you’re located and the specifics of your policy. The good news is that many insurers offer customizable plans that can be tailored to your requirements.
By discussing your concerns with your insurer, you’ll be well on your way to ensuring comprehensive protection against the unpredictable forces of nature.
4. Don’t Forget About Home and Contents Insurance
When it comes to looking after your property, it’s often the finer details that can get overlooked, such as the importance of home and contents insurance.
While strata title insurance may cover communal areas within your complex, it’s your unit and your most treasured possessions that also need protection. After all, your home’s much more than just a building. It’s where your favourite things are, from your family heirlooms to your modern tech.
Home and contents insurance provides a financial safety net for your personal items, ensuring they’re protected against a variety of risks, from theft and fire to many other unexpected events.
If you invest in full coverage, you can trust that your beloved items are safe and enjoy your home in peace. So while you’re busy securing your property from outside threats, make sure you also look after what really makes it your own — the contents that make it a home.
5. Understand Your Liability Coverage
Next up: understanding your liability coverage. But let’s backtrack for a second — what exactly is liability coverage and why do you need to know so much about it? Well, liability coverage is a fundamental part of home insurance that every strata title owner should familiarise themselves with.
This is because it serves as a financial safety net should accidents or injuries occur on your property — whether it’s a guest slipping over in your unit or your pet causing damage — liability coverage is how you’ll be financially covered for these unexpected events that go beyond the physical structure of your property.
Knowing about liability coverage is important as it covers your finances and personal assets against accidents or damage for which you could be held legally responsible. By ensuring your home insurance policy has adequate liability coverage, you can relax knowing you’re protected against the unexpected.
6. Always Review Your Strata Title By-Laws
Another thing to know is that all strata complexes have a unique set of by-laws that outline the rights, responsibilities, and rules for residents. And, you guessed it, these by-laws can affect your insurance coverage.
For example, some by-laws might prevent you from making certain modifications or installation, and not abiding by these by-laws can impact your insurance policy. It is essential to review and understand these by-laws to make sure your home is up to code and you have appropriate insurance coverage.
Don’t get caught without coverage over something in the fine print. Know your rights, protect your property, and stay in the know!
7. Regularly Review and Update Your Policy
Finally, life in a strata complex is dynamic and the only guarantee is that things will always be changing. So, make sure you review your policy on a regular basis to make sure it’s keeping up with your needs.
Things like renovations, upgrades, change in by-laws or increasing property values can mean your current coverage won’t cut it, so check in with your insurance provider on the regular to make sure you’re adequately protected.
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At the end of the day, it’s super important to remember that being a strata or stratum title owner involves some special responsibilities, including getting to know home insurance. It’s about protecting more than just your patch of brick and mortar — it’s about securing your right to peace of mind.
So, if you’re moving into a spacious townhouse or a cosy apartment, insure away. After all, it’s more than just four walls and a roof — it’s your new home!
