Body Corporate groups (Strata and Community titled) have a legal obligation to insure their common property and other insurance items. In Strata titled groups there is an additional requirement to insure the whole building and all improvements. Stratarama can review your property and the group’s documentation to assist in determining the legally required covers for your property. The group will then need to determine the amounts of cover which they require, or appoint a Valuer to offer them guidance in this area.
The below pages will take you to information on Strata Insurance from the Insurance Council of Australia, our partner Insurer’s Product Disclosure Statement pages and information regarding Landlord and Contents Protection insurance.
Residential strata insurance (also known as body corporate cover in some states) is general insurance that covers common property under the management of a strata title or body corporate entity. Owners of strata titles typically share the premium costs of strata insurance as part of their strata fees and liabilities. Holding strata insurance is mandatory under each state’s relevant strata legislation.
Strata insurance generally covers common or shared property as defined on the title of the property. This might include common areas, lifts, pools, car parks, gardens, wiring, balconies, walls, windows, ceilings and floors. Strata insurance must provide liability cover in the event people are injured on common property. You should check what is covered under your strata policy.
Strata insurance is like any other form of insurance, in that there are restrictions to the policy expressed as exclusions. Each insurer has different exclusions and policy terms and conditions. Make sure you understand what is excluded from the policy your body corporate or strata manager has purchased. Exclusions can be for certain risks, such as landslip or flood, or for certain property features such as fencing. Remember, strata policies do not cover your contents and personal items.
No. You should make sure you have appropriate contents cover for your belongings and for those things strata insurance does not protect. Strata insurance covers only common or shared property. This may include some of the fixed parts of your unit, but will not cover everything. It is important you read the policy purchased by your manager or body corporate to understand what is and is not covered in your unit.
A number of insurers in Australia provide residential strata insurance cover. Many strata managers or body corporates use a broker or specialist underwriting agency to negotiate cover. What cost factors contribute to the premium? Each strata insurer develops and offers a unique commercial product in accordance with its underwriting appetite. Some common factors contributing to the premium include:
- Government taxes on insurance (stamp duty and GST)
- The age and condition of the building
- The replacement cost of the building
- The risk profile of the location
- The claims history of the strata complex
- Commercial activities carried out on the premises, such as holiday letting
Fee and commissions from agents
- The level of excess payment selected by the body corporate, payable at the time of a claim
- The costs of common property, for example car parks, stairwells, fire protection systems, lifts and pools
Question the level of excess negotiated by strata managers and body corporates. Sit down and work out how much it would cost you to repair and rebuild in the event of a natural disaster and work out from that how much excess you could afford to pay
We were fortunate to find STRATARAMA recently and shifted the management of our strata group from other managers to STRATARAMA… The instant improvement has been noticeable! STRATARAMA made shifting companies seamless, and really guided our members through the process… We are looking forward to the continued hands on approach and communication driven service we are receiving… Highly recommend!