Units & apartments are becoming more & more popular as our population increases, the desire to live closer to city centres & even the wish not to spend our down time trying to look after a lawn or garden. If you live in an apartment or unit, your most likely are a member by default of the Strata Corporation that owns the site, previously known as Body Corporate or Owners Corporate.
To cover the building(s), common property such as lifts, gyms, stairwell(s), car parks and other shared spaces, Strata Insurance exists to protect the interests of all members of the Strata corporation for loss or damage to the structure(s), common contents and any liability arising from the building or common areas.
As a result, the premium is shared among the various strata members, also known as lot owners. The more sizeable the strata complex, the more likely a professional body corporate manager will be appointed to handle the management of the strata complex. Body Corporate managers generally see insurance cover as another revenue stream earning commission on the placement of the insurance. This can work against the best interests of the lot owners as they invariably do not have access to all the insurance companies providing this type of cover.
Strata insurance can be organised for any registered strata or body corporate body, and may include townhomes, duplexes, or other pieces of property where owners share a common wall or part of the property.
In a word – no! Commercial strata buildings are also very commonplace & work on the same basis i.e. the structure & common property and liability arising from the structure and common areas are covered under a Commercial Strata policy.
The type of businesses occupying the commercial strata property can cause issues for both other members of the same strata facility and the owner of a strata unit (in a investor scenario) if the type of business is considered high risk, such as tattoo and massage parlours. Most commercial strata insurers will not want to continue to provide cover in this scenario resulting in substantially increased premiums presuming cover can be found at all!
Strata insurance covers owners’ fixtures or improvements that form part of the building, such as showers or baths and even kitchen cupboards. It also covers common contents of any shared area, such as carpets, furniture, or shared appliances.
There are a number of additional benefits provide under strata insurance, including Loss of Rent, automatic increase in sums insured in the event of a local catastrophic event (forcing up repair costs in the area) and even theft of funds by the body corporate manager.
Strata insurance does not cover items within an individual unit, such as carpets, curtains, blinds, or your own furniture & other personal contents. Cover can be confusing, hence why you should contact MIB to organise your strata insurance cover.
Some of the contributing factors are amount of the sum insured, claims history, the age or the condition of the building, the location of the building and if there are additional services such as gyms, swimming pools and lifts, which will increase the premium. If you live in an area prone to cyclones or other natural disasters, the premiums will rise accordingly.