For most people, dealing with insurance is enough to guarantee a raging headache. Unfortunately, for owners and tenants of strata-titled properties, insurance requirements and details are even more complicated.
Here at SSKB, we commonly receive questions from bodies corporate, owners and tenants about what they are responsible for and what their strata insurance should cover.
We’ve compiled the following information to help you understand this tricky issue!
Under the Body Corporate and Community Management Act, the body corporate is responsible for insuring common property and body corporate assets, as well as buildings in which lots are located.
However, the body corporate’s responsibility in insuring a building depends on how the community titles scheme is registered:
Sound simple enough? But do you know what constitutes ‘the building’?
Your body corporate building insurance will cover the full replacement value of the building structure including improvements and fixtures.
As all insurance policies differ, we strongly advise that you check in your policy what is covered. In your unit, the things which should be covered by the body corporate building insurance include:
As a unit owner, you are responsible for all items from the interior paint inwards (minus fixtures and improvements as listed above). This means you should insure:
If you own a unit, but it is tenanted, it is a good idea to take out a form of landlord’s insurance. This insurance will cover the items owners are responsible for which are not covered by the body corporate’s policy (such as carpets, light fittings, dishwashers, air conditioners). Your tenants, however, will be responsible for insuring their own furniture and personal belongings.
Landlord’s insurance will often include other covers such as accidental damage, malicious damage, and loss of rent.
Your building structure, bath, sink and bench tops are covered by the body corporate. Your carpets, light fittings and dishwasher are covered by the landlord. So what are you responsible for?
It is highly encouraged that you take out contents insurance for the items you own within the unit. This may include:
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