While most strata committees cover the insurance basics, some issues can be overlooked without careful oversight. Lesser-known or easily missed exposures can cause serious trouble down the line, so it’s important to stay informed.
Levies are an essential component of strata living, ensuring the smooth operation and maintenance of your property. But you may be curious about where all the money from strata levies actually goes. It’s a fair question, considering the significant financial commitment involved.
Strata management is a dynamic world, and the rising costs of strata scheme insurance can seem quite confronting. In the last 12-18 months, there has been a notable upswing in residential strata premiums due to several factors, including recent natural disasters, industry-wide rate increases and more.
Why have insurance? Landlord insurance is specifically designed for investors, and many investors have interests in strata schemes. It generally provides coverage against damages, losses and liabilities that may occur during the rental period.
Strata levies are a common feature of multi-unit residential properties and a common question is why are my strata levies so high? The fees can vary depending on the size and complexity of the property, the level of amenities and the quality of the building and facilities.
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Strata committees must ensure the owners corporation holds the required insurance policies, including building insurance, public liability insurance, and office bearers’ liability insurance, in line with strata legislation.
Common property generally includes the building structure and shared areas, which are covered by strata insurance. Lot owners are usually responsible for insuring contents, fixtures, and any improvements made within their individual lot.
Office bearers’ liability insurance protects committee members from personal financial loss arising from decisions made in good faith while performing their duties. Without it, committee members may be exposed to legal and financial claims.
Underinsurance often occurs when buildings are not regularly revalued. Rising construction costs and changes to the property can mean coverage no longer reflects the true replacement value, exposing owners to significant financial risk.
Failing to disclose changes such as renovations, upgrades, or new risks can lead to claims being reduced or denied. Accurate disclosure ensures the policy remains valid and provides appropriate protection when needed.
Committees can reduce risk by arranging regular building valuations, reviewing policies annually, maintaining accurate records, seeking professional advice, and ensuring all insurance obligations are clearly understood and met.
