In general, strata insurance provides coverage or protection for strata-titled properties or buildings with shared property, such as commercial buildings, apartments, and townhouses. It is a specialised insurance product designed to ensure all strata-titled properties are covered in adherence to the Strata Titles Act, depending on each state.
Shared property in strata-titled buildings includes common areas specified in the title, such as the parking area, building walls, balconies, windows, doors, lifts, roofs, floors, shared pools, gardens, and driveways.
With strata insurance, your building is covered for certain insured events like break-ins, accidental damage, malicious damage by tenants, and extreme weather events such as fire, flood, and storm. The insurance premium is usually shared among all owners or body corporate members and included in their body corporate fees.
Strata insurance can also cover certain shared contents like gym and pool equipment and laundry facilities, although at an additional premium.
What Strata Insurance Details Are Specific to Western Australia?
For owners, corporations, or strata management, strata insurance in Perth and the rest of Western Australia provides comprehensive protection for strata title buildings, including shared areas such as parking, driveways, or stairways. Plus, there is an option to include coverage for shared contents.
Residential and commercial strata insurance in Western Australia, otherwise known as body corporate insurance, includes Perth and the rest of Western Australia. It covers property and common contents being managed by a body corporate or strata company.
The council of owners is mandated to take out insurance on behalf of the strata company. The responsibility of paying for common property maintenance and repair and public liability in common areas is borne by strata companies as well.
Based on the Strata Titles Act 1985 (WA) and other legislation, minimum cover for the following is mandated by body corporates and councils of owners.
- Strata owner property: Covers building and common area damage and repair costs. These include the floor, entryways, external walls, staircases and fire escapes, ceiling, balconies, as well as building plumbing and wiring systems.
- Liability to others: The policy’s automatic public liability insurance covers incidents when someone is injured or when something they own is damaged within common areas or while at your property. In such instances, your body corporate may be considered liable due to negligence and will be required to compensate the victim.
In Western Australia, strata insurance optional extras include:
- Fraud and misappropriation
- Break-ins or theft of shared common area contents
- Accidental building damage
- Malicious damage by tenants
- Machinery breakdowns
- Fire, flood, storm, and other extreme weather events
- Repair and recovery after a natural disaster
- Fidelity guarantee
- Office bearers’ legal liability
- Voluntary workers’ cover
- Workers’ compensation cover
- Lot owners’ fixtures and improvements
- Government audit and legal expenses
Owners of strata units typically split the total strata insurance cost, which is the product of negotiations between the insurer and the strata company. Any calculated excess and premium are presented to the strata owners.
Insurance costs are determined based on certain factors, such as government taxes, building age and condition, pre-existing site risks, vulnerability of the insured property to an insured event, and the claims history of the body corporate.
Types of Strata Insurance
There are two basic types of strata insurance:
- Residential Strata Insurance: A requirement for strata-titled properties. This usually covers building and common area contents, loss of rent, legal liability, emergency and temporary protection, removal and storage of contents property damage, and temporary accommodation and rent.
- Commercial Strata Insurance: An essential requisite for commercial strata-titled properties intended to cover common areas, emergency and temporary protection, temporary accommodation, rent and storage, removal and storage of insured property because of damage, emergency assistance and legal liability in the event of personal injury in connection with the insured property.
Manage Strata Insurance Complexities with Phoenix Insurance Brokers Pty Ltd
Strata insurance can be complicated if you are not well-versed in Australian strata laws and state-based strata insurance rules and regulations.
With Phoenix Insurance Brokers Pty Ltd, you can efficiently deal with strata insurance matters, whether yours is a residential or commercial strata property. This way, you can rest assured that your property is adequately protected no matter what happens.
If you need more information or advice concerning strata insurance in Perth or Western Australia, please get in touch with Phoenix Insurance Brokers Pty Ltd.
Strata Insurance FAQs
If you own strata-titled property, you need to have strata insurance. As mandated by law, particularly the Strata Titles Act 1985 (WA), you need to get strata insurance through your body corporate or council of owners
Mandatory cover for strata property buildings and common or shared areas specified in the title, as well as for liability to the public or others who get injured or whose property gets damaged while in a common area or any strata-titled property are required in Western Australia. However, strata owners can also specify if they want to include optional extras for better coverage.
Strata insurance is handled by the strata property council of owners. Under the specific conditions set in the Strata Titles Act and the by-laws in force for the strata scheme, the council should act for and on behalf of the strata company. They are also subject to any or all restrictions imposed or directions given during a general meeting of the strata company (owners managing a strata property).
The strata company and the insurer typically handle negotiations in determining the total strata insurance costs, and these are then presented to all strata owners for deliberation.
Aside from taking care of insurance matters, the strata company is responsible for the maintenance of common areas and all types of paperwork/documentation, organises meetings, collects membership fees, and handles dispute resolution when conflicts between strata owners arise.