Why is Strata Insurance Important in Australia?
Strata insurance is a crucial component of the property and home insurance market in Australia. This type of insurance is designed for strata-titled properties, which include apartments, townhouses, and similar dwellings where ownership is shared.
What is Strata Insurance?
Strata insurance provides coverage for the building and common areas of strata-titled properties. This includes shared spaces like hallways and lobbies.
It is essential in Australia because it helps protect property owners from significant financial loss in case of damage or destruction. It also covers the costs of repairs or rebuilding, and any legal liabilities for injuries or damages to third parties.
Why Do I Need Strata Insurance?
Strata insurance is not only important but also a legal requirement in many cases.
It’s advisable to check with your strata manager or body corporate to understand the specific insurance requirements for your property.
Strata insurance often provides more comprehensive and cost-effective coverage compared to individual policies taken out by unit owners.
It typically covers risks such as damage to common property, legal liability for personal injury or property damage, and loss of rent if the property becomes uninhabitable.
What Does Strata Insurance Generally Not Cover?
While strata insurance covers a wide range of risks, there are exclusions. Generally, it does not cover:
- Wear and tear
- Known risks that have not been addressed (e.g., an unrepaired leak)
- Building defects
How to Get Strata Insurance
Here are the steps to obtain strata insurance in Australia:
- Assess Insurance Requirements: Evaluate the needs of your strata scheme, including shared assets, property values, and potential liability exposures.
- Compare Providers: Shop around to compare prices from different insurance providers to get the best coverage at the lowest cost.
- Review Policy Details: Thoroughly study the policy to understand its coverage, including exclusions and limits. Consult an insurance broker if needed.
- Purchase the Policy: Once you find a suitable policy, you can purchase it directly from the provider or through a broker.
- Maintain Coverage: Regularly review and renew your strata insurance to ensure it continues to meet the needs of your strata scheme.
In Australia, strata insurance is often mandated by law. The owners corporation, or strata corporation, is usually responsible for arranging and paying for this insurance.
How is Strata Insurance Calculated in Australia?
Several factors influence the calculation of strata insurance premiums:
- Base Premium: The premium is based on property type, location, age, and coverage level. Typically arranged by the strata manager or body corporate, it should cover the building and common property, personal belongings, and legal liabilities.
- Excess and Exclusions: Lower excess usually results in a higher premium. Better risk management, such as fire suppression and security, can lead to lower premiums.
- Claims History: Properties with high claims frequency or severity often face higher premiums.
- Stamp Duty Tax: This tax, based on the policy value, varies by state or territory.
- Emergency Services Levy (ESL): A percentage of the premium, this levy funds emergency services like fire brigades and ambulance services.
- Goods and Services Tax (GST): Calculated at 10% of the insurance value, GST applies to strata insurance premiums.
Conclusion
Strata insurance is vital in Australia for protecting shared property and common assets in multi-unit developments.
It covers various risks, including damage to common areas and liability for injuries. Typically required by law, it is managed by the owners corporation.
For tailored advice, consult with a strata insurance specialist to ensure your policy meets all requirements and helps minimise costs.
For comprehensive coverage and peace of mind, reach out to Sirius Insurance today. Our team of experts is ready to help you find the perfect insurance solution tailored to your needs.
Don’t leave your protection to chance, contact Sirius Insurance now and secure your future with confidence.
