Insurance in a Strata Complex – so who exactly insures what?

Insurance can be confusing at the best of times, but even more so for strata complexes who share common property – are you responsible for insuring this? Or does everyone in the complex chip in? And if you do, is everything covered in the common area or only certain parts? What if you’re an investor and your strata complex is being rented? See, it’s complicated, but you’ve come to the right place!

Insurance for strata properties is not as simple as it would be if you were insuring a detached house. The owner would be responsible for the actual building (the house), as well as internal fixtures like carpets and light fittings and possessions within the property. If it’s rented, then there’s tenant related risks that need to be considered, like rental losses and any potential damage caused by the tenant to the property. Speaking of tenants, they need to have renters’ contents insurance to cover their own possessions within the property.

So that all seems relatively straightforward – but things are a little bit more complicated if the dwelling in this scenario is a strata complex and not a house. This is because the complex is owned collectively and managed through the body corporate (all of the owners within the complex who share common property), so the responsibility for insuring the complex doesn’t actually fall on the landlord but instead falls on the body corporate to take out strata insurance. Clear? Well if not, here’s an overview.

So, what does strata insurance cover?

• The complex structure and common property
• Fixtures and fittings which form part of the building (balconies, windows, ceilings etc.)
• Appliances, equipment and furniture in common areas
• Events like theft of items in common areas and storm damage
• Liability if people are injured on common property

In saying that, many landlords assume they don’t need to take out insurance themselves given the complex is covered by strata insurance – but this isn’t the case.

To be properly insured, they need to cover fixtures and fittings within their unit/apartment (ie. curtains, light fittings, paint etc.) as well as legal liability and if relevant, tenant-related losses – similar to the items listed above for detached houses. This also goes for tenants, they need to take out renters’ insurance for their own possessions.

Here’s a quick guide that covers who is generally responsible for insuring what, when it comes to a strata complex (source: rentcover.com.au):

Whether you’re an owner occupier, landlord or tenant of a strata complex, hopefully this article has helped simplify the complexities around the different types of insurances! If you’re still unsure about cover for your particular situation, reach out to your insurance provider to seek further advice.

And while we don’t offer insurance, Summit Realty’s Accredited Strata Manager Kim Dawes can offer free, no obligation advice to help you review your current strata management.

Click here to find out more, call Kim on 9592 8188 or email strata@summitrealty.com.au