Individuals who own and lease their strata properties often hold expectations that Strata Insurance will insure them for events occurring inside their apartment – this is not the case. Landlord Insurance is essential in order to cover a landlord’s fixtures and fittings, rent default and public liability for inside the unit.
Strata Insurance provides cover for a range of circumstances specifically related to living in a strata community, including:
- Public Liability – cover for the legal liability of Owners Corporations.
- Contents – cover for common contents such as appliances, equipment, furniture, fittings and works of art in any common area for which the Owners Corporation is responsible.
- Fidelity Guarantee (optional extension) – protection for the Owners Corporation against fraudulent embezzlement or fraudulent misappropriation of the Owners Corporation’s funds and tangible assets.
- Office Bearers (optional extension) – protects members of the Owners Corporation Committee where liability has arisen from an alleged or wrongful act, omission or breach of duty.
Lia de Sousa, Director of Resolute Property Protect, says,
“Many people are not aware that Strata Insurance does not cover owner’s fixtures and fittings such as carpets, blinds, light fittings and public liability inside their lots/units.
As Owners Corporation managers, it would be prudent to warn your property owners of the risks of lacking appropriate insurance covers such as Landlords and Contents Insurance. Without this cover owners could be exposed to a significant physical loss or public liability claim.”
If a visitor slipped inside your client’s apartment and was hurt, the injured party might decide to sue the Owners Corporation to cover their medical expenses. In this instance, the Owners Corporation could say they are not responsible as the incident took place on private property. The owner of the lot/unit – the landlord – may then be held liable.
In another scenario, a pipe bursts in a property and causes serious damage to the carpets and walls. While the strata policy will cover damage to the walls, the carpet would not be covered. Carpet is classified as a contents item, and is therefore the responsibility of the property owner.
In this instance the owner would need to make a claim under their Landlord Insurance to repair the damage. Landlord Insurance should offer protection in these circumstances, as long as the cover has been extended appropriately.
Looking for more material to educate your clients on Landlord Insurance?
Resolute has published another article which explores how quality Landlord Insurance can help maximise an owner’s rental income.
To read the full article, please click here.
For further guidance or educational material to help inform your clients on protecting their rental income, please contact your Resolute Account Manager.
T: 1300 668 033