Building Insurance for a Strata Unit: What is strata insurance and building insurance and which do I need for a strata unit?

What Does Building Insurance for a Strata Unit Cover?

Building insurance for a strata unit typically covers the physical structure of the building, including walls, roofs, and fixtures. It may also extend to cover common property areas and facilities within the strata scheme. Common types of insurance cover include damage from natural disasters, fire, theft, and vandalism. Some strata insurance policies may include coverage for loss of rent in case the property becomes uninhabitable due to an insured event. 

While building insurance offers comprehensive coverage, there are common exclusions that unit owners should be aware of. Typically, exclusions may include damage resulting from wear and tear, neglect, or intentional acts. When considering if you need building insurance, remember that some policies may not cover specific natural disasters unless additional coverage is purchased. This is why you have to read the product disclosure statement carefully to identify these exclusions and understand what is not covered, ensuring that you are not left vulnerable to potential risks before making a decision.

Do I Need Contents Insurance for My Strata Unit?

There are differences between strata insurance and contents insurance and it is important to know them as both insurances serve different purposes. While strata insurance covers the building and common property, contents insurance specifically protects the personal belongings inside your unit. This includes furniture, electronics, and other valuable items that may be at risk of loss or damage. Contents insurance typically covers loss or damage to personal items due to events such as theft, fire, or accidental damage. Depending on the policy, it may also cover items that are temporarily outside the home, providing further peace of mind. 

When deciding on the right level of contents insurance, consider the total value of your home contents and your financial situation. It is advisable to create a detailed inventory of your belongings, estimating their worth to determine the appropriate coverage level. Consider any high-value items that may require separate coverage or endorsements. Comparing various insurance policies and their terms can help you select a product that aligns with your needs and budget, ensuring that you are adequately protected.

What Insurance Do I Need for a Strata Unit?

When considering what insurance you need for a strata unit, you need to know the different types of coverage available and how they work. Strata insurance is a must-have for all strata properties. This insurance protects the building and common areas, such as hallways, gardens, and shared facilities. It is typically managed by the owners corporation, and the cost is included in your annual levies. Strata insurance covers structural damage, liability for injuries in common areas, and repairs to shared property, ensuring that the building remains safe and functional for all residents.

However, strata insurance does not cover personal belongings within your unit. For that, you will need contents insurance. This type of insurance protects your personal items, such as furniture, electronics, and appliances that are not permanently attached to the building. If you experience theft, fire, or water damage to your personal belongings, contents insurance will help you recover the costs. Unit owners should have this coverage, as relying solely on strata insurance will leave your personal items unprotected.

In some cases, if you are renting out your strata unit, you may also consider landlord insurance. This insurance provides coverage for loss of rent and damage caused by tenants. It is particularly useful if your property becomes uninhabitable due to an insured event, as it can cover lost rental income during repairs.