Insurance is one of the most significant aspects related to system of strata management which is being followed in Sydney and most other regions in Australia. Though insurance premiums for strata are going up, unit owners still find them more beneficial as compared to standard policies for households. As an owner of a strata title, the strata fees that you pay includes the cost of insurance premium. Since the matter involves your hard-earned money, it is essential for you to know about few basics before you sign the dotted line to buy a strata insurance.
Read here to make an informed choice.
Know what is being insured?
Most of the strata management companies in Sydney purchase insurance policies that cover shared areas, balconies, roofs, lifts, toilets, cook-tops, parking lots, gardens, walls, ceilings, floors, doors, windows, heavy machinery , air-conditioners, water-coolers, water-pumps etc. There could be more exclusions or inclusions to this list depending upon the strata-insurance company you choose to associate with.
While signing a contract, do ask for a list which spells out everything that is being covered under the strata policy that you would offer to your existing or prospective clients. Apart from the general cover, cost of legal-proceedings in case of a dispute, cost of rehabilitation and rebuilding in case of a disaster and cost of hospitalization and treatment in case of a mishap must also be a part of the strata insurance policy.
Consult an insurance specialist
With the growth of strata management companies in Sydney, insurance companies have also geared up to reap benefits out of this situation. There are many good insurance companies in Sydney where a strata manager can go to and purchase a policy.It is advisable to take guidance from an insurance specialist or a broker to negotiate the terms and conditions the insurance cover. This would help strata managers to understand the financial nitty-gritty of their insurance policy and provide them with options for keeping costs within economically-beneficial limits.
Components that push premium cost up
- Taxes levied by the Government
- The condition,age and calculated replacement cost of the building
- Assessment of a location's proneness to disasters or other risks
- Nature of in-house commercial activities allowed within the premises
- Commissions and fees from agents
- Cost of shared areas such as swimming pool, lifts, parking-lot etc
Exclusions need to be clarified
It is important to be aware of the fact that insurance for strata residences is not an all-inclusive deal. The list varies from one insurer to another , hence the strata-insurance buyer should read the details of the policy, understand any technical terms that they come across and ask specifically about what is not included in the insurance cover. Moreover, strata insurance should not be confused with home-insurance.
Home insurance takes into account financial losses related to property owned by you. covers financial losses associated with damage or loss of a property you own; whereas strata insurance covers cost of damage to a property that is being operated under a strata-title/unit or company title.
Having insurance products tailored according to your circumstances is a way to ensure financial security and peace of mind for your family, community and yourself. While choosing one, make sure you do follow the tips mentioned above. If you have anything to say or ask about strata insurance, please let us know in the comments box below.