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Strata insurance – common area contents

Today I decided to write a small post about an important element of Insurance for many Strata Corporations in S.A (and Nationally) – Common Area Contents.

This can be an element of Building cover that is overlooked by unit Owners because of the often small level of cover required by a Strata. Contents insurance can cover many things, from brooms, vacuums, etc stored in a common storage cupboard, right up to Lawn mowers, hedge trimmers, edgers, and other garden equipment stored in a common shed. These items start to add significant value and should be properly insured under the ‘Common area Contents’ part of your Strata building policy. The group could be storing strata owned Pool maintenance equipment, perhaps they have some art work hanging in the lobby, or other various items that fall under a common area contents section of your policy. It is in the best interests of the group to discuss what common area contents may be at your site and then work out what level of cover the group requires to protect themselves from theft or loss. If your Committee or Body Corporate Manager have not assessed this, now might be a good time to ask –

Do we have common area contents?”.

This is also a good time to remind Owners that common area contents is for any items stored on the common property and owned by the Strata Corporation – for common use, to the benefit of the group. This section of your Policy does not cover personal belongings owned by an Individual Resident/ Owner or Tenant. For example, if you personally are storing your bicycle outside or a table and chair, pot plants, etc – items that you own and are for your private personal use – these items are not covered by the Common Area Contents section of your policy. Owners (and Tenants) should therefore 1. Make sure that they limit their exposure by storing minimal items on the common area (even if the Strata Members approve) and 2. Contact their personal Contents Insurer or other Insurance Companies to enquire about their policies and whether items that they store outside of their unit are covered in the event of theft or loss.

Readers should also note that if the group have common halls and foyers, the common area contents may need to cover (depending on your policy wording) things such as – Light fittings, window furnishings, carpet and non-fixed storage cupboards. For example, in the event of a water damage claim, if water causes damage to the foyer ceiling and also a non-fixed storage cupboard, carpet and light fitting, then replacing these items may not be covered unless the group has “common area contents” and to a sufficient level to cover these items for repair.

Remember that taking out insurance (personal and common) is entirely about providing you with protection from the risk of loss. So knowing what you are covered for and adequately protecting yourself and your Strata Members is of utmost importance. If you are unsure, check the Policy wording, the product disclosure statement or just contact your Insurer to get the right information. To ensure you are protected, notify your Insurer of any special items that you may have stored

General Advice Warning:

The information contained in this article is of a general nature only. It does not take your specific needs, financial objectives or circumstances into consideration. You should look at your own personal situation and requirements before making any financial decisions. You should also refer to your Strata Insurers, Product Disclosure Statement and Financial Services Guide where relevant, before making any financial decisions.

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