Having worked in the strata industry for some time, one of the most common stories I hear is unit owners or occupiers not having the right insurance and being left out of pocket for damaged property, even when not at fault. I regularly hear questions such as:
Unfortunately, whether you’re at fault or not is not always relevant. It’s important to ensure you have the right cover for your own property.
There are several aspects of property insurance in an Owner’s Corporation to consider including building and contents, the meaning of which may differ depending on whether you’re an investor or owner occupier. So how do you know what level of cover you need? Let’s take a look.
Building insurance refers to the structure of the building itself. The best way I have heard it described is this: imagine picking up the building, turning it upside down and shaking it. Anything that doesn’t fall out is considered the ‘building’ and is normally incorporated into this level of insurance. In most units where there are multiple apartments in one ‘building’, the Owners Corporation takes out this necessary building insurance. In most gated communities, where each house stands individually, this building insurance is the responsibility of each home owner. However, it’s important to remember that every arrangement is different so be sure to contact your owner’s corporation manager and check who is responsible to insure the ‘building’ in which your lot is housed.
Most of us would be fairly familiar with the concept of contents insurance. To finish off our metaphor above, it is all those things that fell out of the building when we turned it upside down. Insuring your contents is not just about what is inside your property; any number of things can go wrong in apartment buildings, gated communities, or office blocks and we see time and time again examples of burst pipes, clothes driers catching fire, leaking hot water systems, fire sprinklers being set off, leaking roofs or windows etc. Any number of events can occur without you or your tenant doing anything ‘wrong’ but nevertheless can end in significant damage to your property. Don’t take the risk and the stress that comes when something does go wrong. Insure your contents today.
If you’re an investor, you don’t have to worry about contents insurance, right? Wrong! Normally, a landlord will in fact have some type of contents in a lot which might include things like blinds or curtains, light fittings, and the big one – carpet. All of these things are in place before your tenant moves in, but wouldn’t fall out if you shook that building. Carpet is one of the most common items I see damaged and, unfortunately, one of the most common not to be covered. Don’t be caught out, if you’re in this category, make sure you talk to your insurer about what is relevant to your lot.
My final recommendation to arrange stress-free insurance (and no, that’s doesn’t have to be an oxymoron) is to consider insuring your property with the same insurer as the owners corporation. While not a requirement and, in some cases, not possible, it can be very helpful for all involved when the same insurer is dealing with a joint claim for common property and personal property. Too often we see insurers attribute blame elsewhere, leaving you, the property owner, stuck in the middle and trying to deal with a myriad of other entities including the owners corporation insurer, the owners corporation manager, the building manager, your agent, your tenant, and tradespeople. So when comparing insurance, consider not just price and coverage, but also the aspect of ‘potential claims hassle’ and get a quote from the owners corporation’s insurer before making your decision.
Don’t let ignorance about insurance end up costing you thousands like it does for so many every year across Victoria and Australia. For more information or to clarify your existing insurance arrangements, contact our affiliate insurance brokers, Whitbread’s, on 1300 792 706. Take control today and ensure you’re insured!
Disclaimer: Please note this article does not constitute property insurance advice. We recommend you talk to your qualified broker for advice suited to your property.