Strata Insurance – What’s covered and What Should you Consider?

There’s a lot to consider when reviewing insurance quotes and policies for your Owners Corporation.

Part 9 of the Strata Schemes Management Act 2015 relates to Insurance and outlines the Owners Corporation’s obligations and other information.

Under a strata scheme in NSW, the owners corporation is legally required to take out strata insurance cover for the building, common property and common contents managed by the owners corporation.

A building is defined as:

  • A structure and part of a building or structure
  • Walls, out-buildings, service installations and other things attached to the main structure
  • Any pipes or cables used to provide services to a party other than the owners corporation or its members (shared services)
  • A boat or a pontoon permanently moored or fixed to land.
  • And generally includes owners’ fixtures and fittings like sinks, shower screens, cupboards, intercom systems and the like.

The policy must cover the building if damaged or destroyed, and pay for:

  • replacing (where destroyed) or reinstating (where damaged but not destroyed) the building back to the same condition it was in when new
  • removing debris
  • the services of architects and others needed to repair the building.

What does strata insurance cover?

Strata insurance covers the following:

  • Common property such as common areas, car parks, stairwells, lifts, gardens, and common floors, walls, and ceilings
  • Common contents such as communal furniture, equipment, and appliances
  • Fixtures and fittings that cover common areas of the building such as ducted air conditioning, balconies, water pipes and sewage pipes
  • Reinstatement and replacement insurance for buildings on common property
  • Public liability insurance for common property areas
  • Voluntary workers insurance to cover people carrying out voluntary works on behalf of the owners corporation

Strata insurance doesn’t cover any personal contents in individual units or lots. For coverage of your own property, there are a couple of options:

Contents insurance

If you’re an owner-occupier in a strata building, you’ll need to take out content insurance to protect your personal assets. Contents insurance isn’t compulsory, but it’s recommended to protect your items – especially valuable assets.

Contents insurance typically covers anything that isn’t included in a strata insurance policy, such as furniture, appliances, clothing, jewellery, internal carpets, light fittings, and blinds – in other words, anything that doesn’t form part of the building structure.

Did you know CHU provides a contents policy for owners and landlords within buildings who already have a CHU Building Policy? Find out the benefits here:

Landlord insurance

If you rent out your strata property, you’ll need a landlord insurance policy. While not strictly mandatory, many mortgage lenders will require you take out landlord insurance before you can have tenants live at your property.

Landlord insurance covers contents you own inside your property, such as fixtures and fittings, including blinds, carpets and light fittings. It can also provide cover in events such as:

  • Theft or damage by the tenant or their guests
  • Legal expenses if you take action against a tenant
  • Liability if a claim is made against you
  • Loss of rent if the tenant defaults on their payments or leaves early

While most contents insurance policies generally cover you for things like damage to the building, fixtures and fittings, or damage from natural disasters, they won’t cover you for expenses incurred as a result of tenants’ actions.

Did you know CHU provides a landlord policy for owners and landlords within buildings who already have a CHU Building Policy? Find out the benefits here:

How can we help more?

Here’s some links to the brokers and insurers we have partnerships with, who continue to provide excellent insurance products to our clients.

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