Does Strata Insurance Cover Personal Belongings?

If you own an apartment or unit in a strata scheme, you’ll have to pay for strata insurance. But does strata insurance cover personal belongings? And what doesn’t it cover? 

When you live in a strata scheme or building with apartments or units, you’ll know that accidents can happen at any time. This includes the damage or loss of personal belongings such as clothing, phones, jewellery, furniture, and carpets. It can either be the result of accidental or malicious damage by tenants, theft, or natural disasters like fires, floods, storms, and earthquakes. This is why it’s very important to protect your personal belongings.

What is strata insurance? 

Strata insurance protects the body corporate (made up of the unit owners), the individual unit owners, and those who live, work, visit, or interact with the building. It also protects common/shared property that’s managed by the body corporate. Strata insurance premiums are typically shared amongst the unit owners as part of their strata fees and levies. 

Holding strata insurance is compulsory in South Australia under the applicable strata legislation. There are two types of strata insurance: residential strata insurance and commercial strata insurance. Mixed-use strata buildings that have both residential and commercial tenants living in them will require commercial strata insurance. 

What does it cover? 

Policy terms and conditions differ between insurers, but strata insurance generally covers the  building, common property, and common contents of a strata scheme in the event of loss or damage. Common property includes the land or space not within a unit like car parks, as well as service fittings like water pipes, drains, and electrical conduits in the walls. Common contents include furniture, carpets, appliances, equipment, general fittings, and works of art in common areas. 

Strata insurance typically covers the body corporate for the cost of repairs, replacements, and recovery. This includes:

• Repairing the building fabric, eg roof, walls, ceilings, windows, doors, and floors.
• Repairing common areas and common property (eg gardens, car parks, balconies and even tennis courts) following accidental or malicious damage.
• Repairing common area equipment and common appliances, eg shared laundry or gardening equipment, elevators, swimming pools, and spas.
• Replacing stolen contents owned by the corporation in common areas, eg lobby furniture and LCD noticeboards.
• Recovery after a major disaster (eg fire, flood, storm or earthquake) including emergency accommodation.

What’s more, strata insurance provides cover for owners’ fixtures, fittings, and improvements that form part of the building, eg built-in ovens, stovetops, kitchen cupboards, hand basins, baths, showers, and ducted air conditioning. The policy can also be extended to include your personal belongings, such as jewellery, collections, furniture, electrical appliances, light fittings, curtains, and carpets. You can obtain cover for your personal belongings by purchasing contents insurance through your strata insurance policy.

 Additionally, strata insurance can provide cover for fraudulent loss of funds, legal liability incurred by office bearers, government audit costs, appeal expenses, and legal defence expenses.

What doesn’t it cover?

Like other forms of insurance, strata insurance has restrictions to the policy, which are expressed as exclusions. Each insurer has different exclusions and policy terms and conditions, so make sure you understand what isn’t covered in the policy.

Generally, strata insurance doesn’t cover damages to windows, ceilings, floors, and carpets in apartments as a result of floods or landslides. It also doesn’t provide cover for property features that don’t form part of the building, such as fencing.

What’s more, if you plan on renting out your property, you’ll need to take out landlord insurance as a separate policy. It’ll cover you for rent default and malicious damage by tenants.

Who organises the strata insurance?

Your strata manager or body corporate is responsible for organising the strata insurance. First, they get a valuation on the building to make sure it’s insured for its full replacement and reinstatement value. Then they use a broker or specialist underwriting agency to negotiate cover.

The insurance premiums that you, as a unit owner, pay as part of your strata levies depend on various factors, including the property’s age and condition, the risk profile of its location, and its history of claims. 

The other benefits of strata insurance 

Strata insurance also provides the following benefits: 

• Public liability – This covers the corporation’s legal liability to others in the event of personal injury or property damage. But it only insures the liability of unit owners when it comes to common contents or common areas. In South Australia, the body corporate must provide public liability insurance for at least $10 million.

• Loss of rent – If a unit becomes uninhabitable due to an insured peril, the unit owner can claim for loss of rent during that period.

• Personal accident for voluntary workers – This ensures that people who perform voluntary work on behalf of the body corporate can attain compensation.

Need strata insurance that covers your personal belongings?

Strata insurance is beneficial for unit owners and it’s important to understand what you are and aren’t covered for. This way, you can utilise your policy and enjoy the coverage with a minimum cost and minimum hassle. 

If you’re after strata insurance that covers your personal belongings, you can learn more here. Whether it’s for contents insurance or landlords insurance, click here to get a free quote online.