Landlords Insurance in a Strata Complex

Guest post by Kimberley Lundberg from Insurance Aid General Brokers

If you own and rent a unit or lot in a strata managed complex, you might be tempted to think that the insurance your body corporate pays on your behalf (Strata Insurance) will protect you against loss of rent and property damage from tenants.

DON’T MAKE THIS MISTAKE!  Many Landlords have found out the hard way why this is an expensive mistake to make.
Strata Insurance and Landlord Insurance serve two very different purposes and in this article we outline exactly why landlords will need both!

What is Landlord Insurance?

Landlord Insurance offers protection against tenant-related losses. These losses can include loss of rent due to tenant default or damage to the property caused by the tenants. If you’re an investor in a strata property and you rent out your property to long term tenants, then it is strongly suggested you take out a Landlords Insurance policy.

What can Landlord Insurance cover?

  • Landlord’s contents, which can include:
    • Internal carpets and/or temporary floor coverings;
    • Blinds and other temporary winder coverings;
    • Light fittings;
    • Air conditioning units if they service the individual lot;
    • Furniture;
    • Other removable fixtures & fittings;
  • Public liability within your lot;
  • Loss of rent due to tenant default or theft/ damage by tenants;
  • Malicious damage to both building and contents (in the case of holiday and furnished rentals);
  • Damage or theft caused by tenants or their guests;
  • Loss of rent due to prevention of access to property or failure to give vacant possession;
  • Loss of rent due to insured events.

What Landlords Insurance doesn’t cover

Landlord Insurance doesn’t cover the personal possessions and furnishings of tenants or owner occupiers living within a strata property.

What is Loss of Rent/Temporary Accommodation Cover in a Strata Policy?

Most Strata Policies cover its property owners for loss of rent, temporary accommodation, contributions and storage costs.  However, this cover is limited to events which are defined in the building section of the policy.

More about the temporary accommodation provision…

This cover offers protection when you occupy your Lot/Unit. Strata Insurance will generally pay the reasonable cost of temporary accommodation that would be incurred if your Lot/Unit is deemed as unfit to be occupied for its intended purpose due to:

  • Damage to the insured property that is admitted as a claim under the building section of your Strata Insurance Policy, or;
  • Reasonable access to or occupancy of the lot/unit is prevented by damage from an insured event that is claimable under the building section of the Strata Insurance Policy.

More about the rent provision…

When you have leased your lot/unit, strata insurance should pay the rent when your Lot/Unit is made unfit to be occupied for its intended purpose due to:

  • Damage to the insured property that is admitted as a claim under the building section of the policy.
  • Reasonable access to /or occupancy of your lot/unit being prevented by damage from an event claimable under the building section of the Strata Insurance Policy.
  • Disruption to your tenants occupancy when your lot/unit is made partially unfit to be occupied for its intended purpose.

To ensure you are protected as a landlord, we encourage you to contact your insurance broker today.

Click here to contact SSKB today. 

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