Just bought an apartment? Just about to sign on the dotted line for your unit? That’s great news!

We always want to ensure that our clients and new apartment owners are equipped with all the important and relevant information and INSURANCE is one of them.

In our previous blog, we detailed how much of your apartment you actually own and you would be surprised by just what that is!

Of course, you are responsible for everything inside your home and the structural aspects too, but when it comes to apartments, it’s slightly different to owning a house.

So we did the homework for you to compare the insurance you’ll need as the:

  1. Resident
  2. Landlord 
  3. Owners Corporation

 

1. Insurance for Apartment Owner-Occupier

As mentioned in our previous blog, you don’t actually own every part of your apartment, but rather just the ‘air space’. Each apartment or lot comes with different ownership, so make sure you know what that is before blindly purchasing insurance!

For apartment owners, the biggest insurance would be Contents Insurance or Combined Home and Contents Insurance.

There are generally 2 types of personal property insurance:

  1. Actual cash value
  2. Replacement cost

Personal property typically includes furniture, appliances, internal carpets, light fittings, blinds, clothing, jewellery and other valuables – anything that isn’t part of the building and within your apartment.

 

2. Insurance for Apartment Landlord

If you rent out your apartment or unit, you would need a Landlord Insurance Policy. If you have a mortgage on your property, it is highly likely that your lender required you to purchase landlord insurance to ensure that your property is tenant ready.

The insurance is generally divided into Building Cover and Contents Cover or taken as a combined cover.

Landlord insurance typically covers:

  • Damage to fixtures and fittings including blinds, carpet and light fittings 
  • Damage caused by natural disasters (storms, lightning, flood, fire, earthquake, hail storms and explosions)
  • Damage caused (and even theft) by the tenant and/or their guests
  • Legal expenses incurred for cases against the tenant
  • Liability if a claim is against you
  • Loss of rent if the tenant default on their payment or breaks contract

 

3. Insurance for the Owners or Body Corporate

All apartments, units, flats, townhouse and of the like, legally require Strata Insurance also known as Body Corporate Insurance. This insurance covers the physical structure of the building as well as any permanent fixtures. Should a person or people get injured on common property, this insurance also covers public liability.

However, certain exclusions can apply depending on the insurance purchased. For example, the following could be excluded

  • Natural disasters such as fire, earthquakes, storm, landslide, flooding, water damage
  • Fixtures and fittings such as fencing, wall coverings, ceilings, floating floors 

The body corporate could opt to extend their covers in the following areas:

  • Body Corporate Legal Liability
  • Fidelity Guarantee Insurances (protects you from fraudulent or dishonest acts committed by members of the committee)
  • Legal Liability incurred by office-bearers
  • Personal Injury/Accident cover for Voluntary Workers
  • Machinery Breakdown or Fusion
  • Government Audit Costs

Need a real-life example? Check out CHU and Strata Community Insurance.

 

When we conduct a Strata Report, we include what insurances were purchased by the body corporate which will specify exactly what is covered. But regardless of if you are a tenant, owner-occupier or landlord of an apartment, it is highly recommended that you are covered by insurance!