Residential strata, also known as body corporate insurance usually tend to cover the common area and property which falls under the control of the management of a body corporate or a strata title.
Generally, the premium of such insurance is shared between the owners of the residential units and the management. The owner’s premium is included in their strata fees and liabilities. Typically, insurance like this mandatory and should always have a public liability so that it covers people that might injure themselves within the common areas.
The legislative requirements for corporate insurance changes between states and territories. Always be mindful to check whether your insurance complies with the laws and regulations governing corporate body insurance in your state. Usually this is not your burden to bear, it is actually the duty of the management or the body corporate to check this compliance, but it doesn’t hurt to be aware of what you are dealing with.
What Does A Body Corporate Insurance Cover?
As mentioned before a body corporate insurance or strata insurance usually covers the common area and some part of the building. The area that it covers has to be pre-defined in the title. The common property can include but is not limited to wiring, lifts, garden equipment, car parks, swimming pools, gardens, windows, walls, floors and ceilings.
A strata policy is much different from home insurance and should cover things that average home insurance won’t.
Inside your unit a strata policy will only cover some fixed things like the wiring inside the walls or the ducted air conditioning. This is usually why before signing an agreement to buy or lease a strata property you must always read the title to find out what is involved and what is not.
What Does A Strata Policy Not Cover?
A strata policy again ONLY covers shared property and some equipment inside your unit. Even this coverage will have an exclusion list like flood damage, landslip or damage to the property’s fence.
None of yourpersonal belonging will be covered by a strata policy whatsoever. Consider another type of insurance for your personal belongings.
What Are the Factors That Contribute to The Premium?
Within a strata scheme the insurance will generally be the same or even less for each unit owner when compared to a premium paid by a standalone owner in the same area.
Strata policy developers often offer a commercial product that is unique to each strata scheme. Some of the common factors that contribute to the product premiums are,
- The law and regulation of the state
- Tax imposed by the government on insurance (GST and stamp duty)
- The condition and age of the stat building or scheme.
- Cost of replacement
- Location risk profile
- Claim history of the management
- Agent fees and commission
- Type of activities carried out on the premises
These are just some of the few things that contribute to the premium of a strata product. There is more to strata coverage and the best way to learn is to consult a professional strata insurer today.