Understanding Insurance – NSW

Even considering an insurance policy is enough to give most people a headache – let alone handling insurance for a multi-storey apartment block.

Under section 160 of the Strata Schemes Management Act 2015, the owners corporation must insure the building under a damage policy (for any damage caused by fire, lightning etc.) for an amount to replace or rebuild the building if the building or any part of it is destroyed or damaged.  The building is defined by the act as being a building containing a lot or proposed lot within the scheme or proposed scheme.  This includes the removal of any debris and professional fees for services which are necessary.   Further under section 164, insurance must be included under the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998 as necessary.  This is furthered to cover any damage to property, death or bodily injury for  which the owners corporation could be liable for.

  • Toilets, baths, basins
  • Sinks
  • Ducted air conditioners (but not mobile or fixed air conditioners which service a particular lot)
  • Bench tops
  • Built in cupboards
  • Windows and doors
  • Fixed tiling

Lot Owners
Unit owners are responsible for all items from the interior paint inwards (minus fixtures and improvements as listed above) as your owners corporation will not insure these items:

  • Carpets
  • Light fittings
  • Mobile/fixed air conditioners
  • Curtains and blinds
  • Furniture
  • House hold appliances e.g. dishwashers
  • Valuables and personal equipment

Investment Owners
If an owner has a tenanted unit, it is a good idea to take out a form of landlord’s insurance. This insurance will cover the items owners are responsible for which are not covered by the owner’s corporation policy (such as carpets, light fittings, dishwashers, air conditioners), and also usually items such as accidental damage, malicious damage, and loss of rent.

Lot Owners/Tenants
Lot owners and tenants are encouraged to insure contents owned by lot owners or tenants within their unit or for any interest they may have in common property.  Items which are typically insured include:

  • Furniture
  • TVs, computers, DVD players
  • Clothes
  • Jewellery
  • Sports equipment
  • Furniture
  • House hold appliances e.g. dishwashers
  • Valuables and personal equipment

Insurance for owners corporations can vary greatly depending upon the requirements of the property.  While SSKB has provided some basic guidelines, we would recommend seeking the advice from professional insurance providers to cater for the needs of your property.

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