Strata Title Insurance

“Strata title” is a term that gets bandied about a fair bit and will be particularly familiar to those who own or rent units, flats or self-contained properties such as town houses. The term strata title can also apply to office space and caravans. Strata titles themselves came into being in Australia from 1961. Prior to this it wasn’t possible to hold a title deed to part of a building or strata. With the advent of strata title, however, owners of a unit were able to receive their own individual title document, and from 1989 this practice was extended to include vineyards or horse stables. Strata property is distinct from common property – common property may include tennis courts, a pool, even laundry facilities but doesn’t include the part of the property that you (the tenant/owner) live in. This area is called a “lot”.

What does it cover?

With the clarification of ownership came new responsibilities – originally owners of these titles found themselves working with other owners to ensure that people who borrowed their properties (tenants) and paid money to do so (rent) were covered should something happen to the property or properties as a result of a storm or similar uncontrollable event. As the property and insurance industry evolved however, this arrangement was formalized. Strata title insurance, then, is an insurance policy taken out collectively by a strata manager on behalf of an Owner’s Corporation and functions in a similar way to home insurance. Nowadays owners are also required to get coverage for public liability in the event that an accident occurs – for example, someone tripping over a hose, falling and breaking their arm. Applying in a different way to individual contents insurance, strata contents insurance insures common internal fixtures – stairwell railings, light fittings and the like. So, effectively, this ensures that the strata owners are covered while any tenants are free to separately insure their personal belongings within the residence.
Strata insurance may cover, for example:

• Loss or damage to the building or both the building and common contents
• Windows, skylights, shower screens and other glass in the building that is accidentally broken
• Temporary accommodation that owner-occupiers must pay for if damage to the building is so bad it is not liveable, or any rent lost if the tenant can no longer live there for the same reason
• Any costs associated with getting rid of debris or having the building repaired for example, the cost of having an architect or engineers repair the damage or rebuild
• Your liability if you are found legally liable for death or bodily injury to other people or for damage to their property OR the death and / or injury of a voluntary worker on the site.

Who pays?

Strata title insurance is paid for by the owner’s of the property collectively through their strata manager. A tenant can take out their own insurance called personal contents insurance. This will cover clothes, furniture, camera, computers, music, white goods and so forth in the event of fire or theft.

Each state has a Ministry of Fair Trading or a department that looks after tenants rights. This same area can help owners with strata title and insurance queries