As a Strata Manager, you’re well aware of the processes involved in obtaining Strata Insurance for clients. But when it comes to protecting the interior and valuables inside of each unit, are your clients aware of what they need?
Given Strata Insurance policies exclude certain fixtures and general contents within individual units (e.g. carpets, curtains, blinds, light fittings and un-fixed electrical appliances), strata unit owners and tenants need to ensure these items are covered for their full value under a quality Landlord or Contents Insurance policy.
Landlords Insurance for Strata Unit Owners
If your strata clients lease out their unit, they need to ensure their investment property is protected with a comprehensive Landlord Insurance policy.
Landlord Insurance is designed to cover:
- loss of rent
- rent default
- malicious damage by a tenant or third party
- legal liability cover should a tenant sustain an injury within the property
- fixtures and fittings e.g. carpets, blinds and light fittings (which are excluded under a Strata policy)
With appropriate coverage, strata unit owners can rest assured that their rental income and property are protected from financial losses.
What level of cover should a Landlord have?
While different insurers provide various levels of cover, Whitbread generally recommend that strata unit owners purchase Accidental Damage Landlords cover to protect against a wide range of insurable events and losses caused by a tenant.
The alternative, Defined Events cover, only offers protection against a narrow range of specified events and may fail to provide cover in the event of a claim.
Contents Insurance for Owner-Occupiers & Tenants
If your strata clients are owner-occupiers or tenants living in a strata unit, it is essential they obtain Contents Insurance. Contents Insurance helps ensure that personal items and belongings within their property are covered against loss or damage.
An incredibly important policy, Contents Insurance can offer protection against:
- loss or damage to the contents of a dwelling for a variety of causes including fire, storm, theft, accidental damage,
- malicious acts caused by a third party e.g. deliberate damage to furniture, certain fixtures and fittings, and carpets (if owner-occupied)
- public liability claims arising from third parties who sustain an injury inside your unit e.g. a guest that trips while climbing stairs.
It is essential that owner-occupiers and tenants protect their personal items and liability exposures under a Contents policy, as these are not covered by a Strata Insurance policy.
Examples of personal items covered by Contents Insurance
Contents Insurance generally covers household and personal possessions such as clothing, jewellery, furniture, TVs, computers, internal carpets, blinds and electrical appliances (where such appliances are not covered by a Landlords policy).
There are some specific high-end items (e.g. expensive jewellery and artwork) that may be excluded under a standard Contents Insurance policy.
Policy holders need to be diligent to ensure that their insurance policy extends to provide full cover for these items where necessary.
Underinsurance is common
If a property owner or tenant has recently sold or purchased expensive items, their Contents Sum Insured may no longer reflect the true value of their belongings.
Owner-occupiers and tenants must re-evaluate their Contents Sum Insured annually to ensure that any additional contents, especially high-value items, have been included in their Sum Insured or noted on their insurance policy. Remaining vigilant and making the necessary adjustments to a Contents policy is the best way to avoid underinsurance and hefty financial losses in a claim.
Examples of what each policy can cover in a claim:
Help ensure your clients understand the type of insurance covers they need when living in a strata property.
For more information on Landlords or Contents Insurance, speak to your Resolute Insurance Account Manager on 1300 668 033.