If you are looking to insure a house or apartment, think about the various insurance policies that cover such buildings. We understand how confusing such information can be, but it is really easy to handle once you get a grasp of it. So, is insurance for an apartment different from house insurance?
Think about it: a renter cannot have the same responsibilities for a house that an actual owner does. You pay rent, but that is where it ends. One day, you will move out of the house, and another will take over. That is unless you plan to buy the house.
However, a homeowner owns the building and does not have a landlord to handle the stress of insurance and repairs. Therefore, the type of insurance that covers both cannot be the same. Allow us to explain in detail.
How insurance for houses and apartments differs
A house owner must use a home insurance policy to cover the entire building. That way, they are not left without financial assistance if there is an insured event. They can also take out a home and content insurance policy to cover the building and its contents.
Such a policy protects the owner if there is a loss or damage to the property and its contents to cover legal liability. However, the funding of the building insurance policy rests on the house owner.
On the flip side, an apartment needs strata insurance. If you are a renter who wants insurance, all you need to concern yourself with is contents insurance. This policy covers all your belongings in the apartment if there is damage or loss.
The insurance that covers the entire apartment or townhouse rests on the owner, not you. The property owner will pay for the insurance, while the body corporate will arrange it. Strata insurance handles the building and all permanent fixtures and covers personal liability if you incur bodily harm on common property.
Investment properties also work with strata insurance but consider taking out landlord insurance policies. Landlords’ insurance policies cover a part of the risks that come with regular renting. Combined insurance of this sort will go a long way in this investment.
While you’re shopping for insurance, check out our tips for getting cheaper house insurance.
Understanding contents insurance
Contents insurance handles only the belongings and possessions you have in a house. It does not matter whether or not it is your house; you can use contents insurance to get financial protection for your belongings.
You should know that insurance providers typically set a limit for high-value items. For example, if you own expensive antiques or jewellery, the policy can only cover it to a certain limit if there is theft or damage. A separate listing for such items should provide adequate coverage but will incur higher payments.
There are two main contents insurance policy types you will find in Australia. One is the new-for-old policy which covers the entire cost of buying a new item to replace an old one if lost or damaged. The second is the replacement value policy which provides coverage only for the current value of an item. It does not cover the full cost.
Understanding home and contents insurance
As an apartment renter, contents insurance is your primary go-to policy. As mentioned, you will protect your belongings in the apartment if you take out this policy. However, for apartment owners, home and contents insurance is your best bet. The same applies if it is a house.
This policy covers your apartment and everything in it. While you can take a separate policy for contents and home, it is not cost-effective. Instead, purchasing a single insurance to cover both is more economical.
Before settling for this policy, thoroughly study the product disclosure statement. It should contain the item value limit, inclusions, and exclusions. This statement will help you see what the policy covers.
Understanding home insurance
Home insurance covers a significant part of your property and all permanent fixtures. The coverage depends on the policy and how much you pay for it, but it does not cover the contents of the home.
Typical home insurance provides financial assistance in the event of a natural disaster, intentional damage by an outsider, theft, fire, and other insured events. There are other possible coverages offered by the insurance, such as legal liability cover and accidental damage cover.
Conclusion: is insurance for an apartment different from house insurance?
Have you checked out Soho’s finance section? It’s chock full of expert-fuelled tips and hacks to hep you along your property journey.
Insurance that covers an apartment is different from that which covers a house. Home insurance works for house owners, but strata insurance works for apartment complexes and townhouses. Landlord insurance covers your apartment if it is an investment property. Landlord contents insurance is also a policy to consider.
