In this fast-moving world with so many uncertainties, it is essential to ensure there is no room for that uncertainty to get to you. But what saves you from the risk these asset classes may impose? Well, strata title insurance is here.
As a corporate employee, you may think of investing in real estate, mutual funds or even stocks. You may start with buying a Strata property – well, why won’t you when it provides so many amenities.
From community living, shared facilities to lower maintenance responsibilities. It does not just provide you great support but also adds to the property value if you wish to sell it in the future. This insurance is exclusive for these properties.
The following article will help you understand all about this insurance and different ways you can use it to protect your assets. Follow along to know all about it – the coverage, what it does not cover and more.
What is Strata Title Insurance?
So, it is important that you protect your investment from any unforeseen circumstance. One of the ways is the strata title insurance which ensures your investment has complete protection.
If you are a part of strata scheme or may be thinking about purchasing a unit here, it is essential to understand the type of insurance.
The strata scheme helps you enjoy the benefits of this insurance along with other benefits. Such as sharing ownership of common property such as gardens, external walls or roof and driveways. The scheme works by giving you the ownership of the stairwells and other common space as well.
If you are in Australia or in the New South Wales region, this may be a more familiar concept. The strata title insurance is mandatory.
This is a type of property insurance where you can get protection for your property – from weather or events such as break-ins.
The insurance benefits you in different ways as an owner or resident. It is also one of those ways you can make the most of your real estate investment in Australia.
The insurance comes from Insuregroup and is a specialized policy exclusively for properties under a strata scheme.
The scheme is all about protecting townhouses, apartments and units with ownership amongst different individuals. Unlike regular home insurance, strata title insurance covers only shared spaces and the building’s structure.
It also ensures the owners collectively protect their contents such as body corporate or owners’ corporations. The insurance ensures the entire building and not just individual apartments get the protection.
Components of a strata title insurance
There are different components of strata title insurance. Here’s all that it entails:
- A strata title is a system that is best for owning townhouses and units with a combination of communal spaces and private residences
- Buying into a strata plan entails buying a “lot” that includes the main unit area and possibly a garage, balcony, or a storage area.
- There are insured events such as severe weather and break-ins. These are some of the top events that negatively affect the property.
- Your body corporate usually arranges the strata title insurance on your behalf.
- Take time to understand the coverage and requirements
- Ensure you have cover for your own contents and belongings that the strata insurance does not cover.
- Speak to your broker about things that are and aren’t included in your policy.
These are all the different ways you can make the most of this insurance and ensure you have a solution to cover all your belongings.
Why Do You Need Strata Title Insurance?
Owning a property is not a small feat – especially in these times with dwindling economies all around. In addition, there can be unexpected events that catch you off guard and add to your cost.
Take the recent wildfires in Australia that swallowed flora and fauna – turning properties to ashes.
Such events demand an insurance that can cover repairs and save the individuals from financial burden. This also ensures there is no financial loss to the individuals such that they can handle such unforeseen circumstances well.
One of the best ways you can do it is by ensuring you have the complete information from your broker. You can sit back and not worry about disputes or any financial strain with strata title insurance.
What Does Strata Title Insurance Cover?
Strata title insurance covers everything in your property, think walls, roofs, guttering, balconies, plumbins to cellars and communal laundries. The expansive cover this insurance provides will tell you how valuable it is.
The insurance cover is quite versatile, nothing like most insurance covers around the world.
It can be applied for properties such as small groups of units, apartment complexes, duplexes, non-freehold townhouses, eco-villages, low-boutique apartments.
Check out the following list for a complete understanding of what the insurance protects:
Building and Common Property
The strata title insurance covers the building structure including the shared areas such as pools, lifts, hallways and gardens. It also ensures any rebuilding cost is under the cover – if these spaces get damaged by insured events.
These include storms, fires and vandalism.
Liability Protection
If someone is injured in a common area, liability claims can be costly. Strata title insurance provides public liability cover, safeguarding owners against these expenses.
Legal Expenses
Disputes can arise between owners or with contractors. Many policies cover certain legal costs, making it easier to resolve issues without hefty out-of-pocket expenses.
Temporary Accommodation
If damage renders units uninhabitable, the policy may cover the cost of temporary accommodation for affected residents.
Fixtures and Fittings
While owners are responsible for contents inside their units, fixed items like kitchens and bathroom fixtures are typically covered under strata insurance.
What’s Not Covered?
It’s equally important to know what strata title insurance doesn’t cover. The insurance does not cover carpet within units, personal belongings and internal painting.
Meaning owners should arrange their own contents insurance. Damage from wear and tear, termites, or faulty workmanship often falls outside the scope of cover as well.
How is Strata Title Insurance Managed?
The responsibility for arranging strata title insurance lies with the owners’ corporation or body corporate. Strata levies pay for the premiums – something that all owners contribute to.
It’s essential for the owners’ corporation to ensure the policy remains up to date and covers the full replacement value of the building and shared areas.
Benefits of Strata Title Insurance
The above sections give you a more than fair idea of how expansive and beneficial this insurance cover is. Now, let’s take a look at the different benefits you can reap when you opt for this cover.
Here’s how strata title insurance provides value to owners and residents:
- Financial Security – Covers costly repairs to common areas and the building structure
- Peace of Mind – Complete awareness of the things it covers reduces stress.
- Compliance – In many regions, it’s a legal requirement for strata properties
- Liability Protection – Protects against claims from injuries on common property
- Collective Protection – Ensures all owners share responsibility for the property
These are only some of the most significant ways you can get the most out of this insurance cover. This is essential as it helps you understand how valuable your property is and how you can save yourself from financial burden.
Tips for Owners and Residents
Even with comprehensive strata insurance, individual owners should consider these steps:
Check Your Coverage
Review your policy details to understand what it includes and what it doesn’t cover. In case you need clarification, speak to a manager or committee members.
Get Contents Insurance
Since strata title insurance doesn’t cover your personal belongings, securing a separate contents policy is essential.
Maintain Your Property
While the owners’ corporation looks after common areas, keeping your own unit in good condition helps prevent claims complications.
Stay Informed
Attend discussions when body corporate meetings make insurance decisions. This allows you to voice your opinion when it matters the most.
How to Make a Claim
If you ever need to claim under strata title insurance, here’s a quick rundown of what to do:
- Report the issue to your strata manager or committee as soon as possible.
- Provide details of the incident, including dates, photos, and any supporting documents.
- The strata manager will liaise with the insurer on behalf of the owners’ corporation.
- Keep records of all communications for reference.
Being prompt and thorough can make the claims process much smoother for everyone involved.
Things to Consider When Reviewing Your Policy
Strata schemes differ, and so do insurance policies. When reviewing your strata title insurance, think about:
- Sum Insured – Does it cover the full replacement cost of the building?
- Excess Amounts – Are they reasonable, and how do owners share it amongst themselves?
- Specific Inclusions or Exclusions – Are there any special clauses you should be aware of?
- Additional Covers – Do you need extra protection for flood, machinery breakdown, or volunteer workers?
Regularly review the policy to ensure it is fit for purpose. Especially when repairs, renovations or upgrades are on the cards.
Protect Your Investment Wisely
Owning a strata property comes with shared responsibilities, and strata title insurance is a crucial part of that. It’s about more than just ticking a legal requirement—it provides financial protection, and peace of mind, and ensures everyone involved is covered against unexpected costs.
Whether you’re a first-time buyer or long-term owner, understanding how strata title insurance works helps you make informed decisions and better protect your valuable investment.
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