Wednesday, May 25, 2022

What is residential strata building insurance

If you’re looking at self-managing your strata property insurance you may be unclear what residential strata building insurance is, why you need it and what it covers.  

Residential strata insurance is designed to protect residential strata buildings against loss, damage and legal liability for:

  • The strata building
  • Common areas
  • Common property (such as lawns, driveways, lifts and pools)
  • Personal injury in connection with the insured’s property
  • The owners’ corporation / body corporate.

The fact that residential strata insurance is mandatory across Australia indicates the level of risk, the expense owners could be liable for and how often claims are made.

Therefore, when choosing an insurance provider it’s important to consider the quality of the product, expertise and servicing levels. Look for a company like Australia’s first and largest strata insurance specialist, CHU, who is the current back to back winner of the underwriting agency of the year.

Here is just a few ways residential strata insurance protects you:

Insured Property

Strata insurance is designed to cover the insured building and common areas such as lawns, driveways, lifts and in-ground pools from events such as theft, storm, water, fire and malicious or accidental damage.

The building and common area contents includes:

Area Items covered by Residential Building Insurance include
BUILDING – refers to all buildings and underground services on the block, including fencing and permanent fixtures and fittings. • Baths • Floating floors
• Toilets • Shower screens
• Common building air conditioning systems • Common area Light fittings
• Windows • Doors
• Hand basins • Built in cupboards
• Sinks • Fixed tiling
COMMON AREA CONTENTS • Carpets, floating floors, other temporary wall, floor and ceiling coverings within common area hallways and lobbies; • Pot plants, mirrors, and other decorations within common areas;
• Appliances such as washing machines and dryers owned by the Body Corporate and used by all unit owners and housed in common laundries. • Any barbeque equipment, gardening equipment and garden or indoor furniture

*Based on CHU’s Residential Strata Insurance Plan

Legal liability cover

Legal liability provides compensation for personal injury or property damage on the common property. For example, a painter working on the property trips on a pot hole in the pathway and injures their back. The painter seeks legal recompense for their medical treatment and lost earnings. The costs could be considerable if the owners’ corporation/body corporate is found liable.

If the owners’ corporation / body corporate is found legally responsible your residential strata insurance will pay compensation to the injured person and pay the legal costs of defending a claim.

Insurance will also cover voluntary workers injured while carrying out work for the owners’ corporation / body corporate under a separate section of the policy.

Rent and temporary accommodation

If you rent out your apartment and it becomes uninhabitable because of damage or access to the property is not possible, because of say a major storm, you could be out of pocket for some time. Residential strata insurance will pay the rent you loseassuming that the nature of the loss that caused the damage is an accepted claim under the policy.

Alternatively, if the apartment you live in becomes uninhabitable the insurance will pay the resident owners temporary accommodation until repairs have been completed.

Fidelity Guarantee

Fidelity insurance protects you against fraudulent misappropriation of body corporate funds committed by a third party.

Machinery breakdown

It’s the peak of summer and it’s sweltering. The buildings ducted air conditioning breaks down and needs to be repaired quickly. Machinery Breakdown cover means the air conditioning can be promptly repaired or replaced at no cost to you.

Office Bearers’ Legal Liability

Strata committee members generally work on behalf of the body corporate on a voluntary basis. With limited time, or experience, unintentional wrongful acts can occur.

Office bearers’ legal liability protects individual committee members for claims made against them for wrongful acts including damages, judgements, settlements and order of costs. Without this protection the individual may have to fund any legal action brought against them from their own personal finances.

Catastrophe insurance

Catastrophe means a sudden and widespread event that causes substantial damage to property over a large area, and as a result of which the Insurance Council of Australia issues a catastrophe code.

If your building is hit by a natural disaster, (such as a cyclone, earthquake or tsunami), catastrophe insurance is designed to cover the body corporate for the sudden escalation in rebuilding costs which can occur due to a shortages of labour and materials.

It also covers the cost to evacuate lot owners and provide emergency accommodation.

When the unexpected strikes speed, to get you back on your feet as soon as possible is crucial. Make sure your residential strata insurance, like CHU’s, offers extensive coverage, 24/7 claims service and support with emergency assistance.

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