What Type of Insurance Do I Need for Apartment?

letmethefuqin on 02/06/2022 - 17:42
Last edited 02/06/2022 - 18:46 by 1 other user

Purchased an apartment, tenant is still leasing it for another 3 months as they would like to see out their lease. Tossing up if I should self manage it or continue with the current property manager. Reading through the paperwork from the real estate they are requesting insurance details.

Now obviously I pay for the insurance in my strata fees

However what happens if the tenant's washing machine floods the place and it goes into down stairs or what happens if they leave the oven on and it burns the kitchen down?

If this covered by the strata insurance (I would assume not). But does contents insurance covers this?

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  chcse on 02/06/2022 - 17:54

  +4

  You'd want landlord insurance to cover your own property that the strata insurance doesn't cover (strata insurance only covers common property).

  Find an insurer that you can cancel midway through and get a pro-rata refund on your premiums or see if they insure for less than a year.

  • 

    salmon123 on 02/06/2022 - 20:33

    +1

    strata insurance only covers common property

    In NSW strata insurance covers the entire building and fixtures within the building, like kitchens/bathrooms or floors (but not floating floors). It will often cover lot owner improvements too (up to some specified value like 200k).

    You'd want landlord insurance

    Landlord insurance will cover things like floating floors that aren't covered by the strata building insurance or damage to the property by the tenant. They might even pay for lost rent, while the place is being repaired.

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  deveshwar0 on 02/06/2022 - 18:02

  You can get a copy of the insurance from strata and go through the inclusions. Anything that is not covered, you should look at insuring yourself.

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  bobbified on 02/06/2022 - 18:30

  +2

  Strata insurance is for the building and common areas only. The general saying is, if you can turn your apartment upside down and shake it, anything that won't fall out is covered by strata insurance (except carpet). Landlord's insurance is the way to go for you.

  However what happens if the tenant's washing machine floods the place and it goes into down stairs

  Tenants should get Renter's insurance, even if their total belongings are not worth much. The policies come with the public liability component up to $20 million or so, so if they accidently cause any damage to other peoples' property, the insurer will cover them.

  • 

    salmon123 on 02/06/2022 - 20:37

    +2

    Tenants should get Renter's insurance

    There's still a case for Landlords insurance. Even though the tenant is ultimately responsible for the damage caused by the leaking washing machine, I wouldn't want to get caught up in trying to sue the tenant for it. Easier to let your landlord insurance deal with it.

    • 

      bobbified on 02/06/2022 - 20:53

      +1

      That's right - I wouldn't be relying on suing the tenant! It'll be like trying to draw blood out of a stone.

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  AndyC1 on 02/06/2022 - 18:34

  +1

  In simple terms strata covers the outside walls and what is in the walls, but not anything attached to the walls inside the apartment. in other words strata does NOT cover kitchen, bathroom, floor coverings (carpet or wood or rubber etc), blinds, paint on walls, internal doors.

  The strata covers the external doors and windows and the pipes in the apartment, but not the electrical.

  • 

    salmon123 on 02/06/2022 - 20:38

    in other words strata does NOT cover kitchen

    Which state are you referring to? It's certainly covered in NSW.

    • 

      AndyC1 on 02/06/2022 - 21:24

      Check the policy as it was not included when I owned an apartment.

      • 

        salmon123 on 02/06/2022 - 21:29

        Check the policy as it was not included when I owned an apartment

        Indeed - I'm pretty familiar with strata insurance policies in NSW and exclusions for Kitchens (or bathrooms) certainly aren't common. I haven't come across anyone offering a discount for excluding kitchens and the like.

        Each region (even within the state) will have different set of insurers offering coverage, so anything is possible.

        • 

          AndyC1 on 02/06/2022 - 21:33

          @salmon123: I was indeed very familiar as I was the treasurer and responsible for the insurance coverage.

          • 

            salmon123 on 02/06/2022 - 21:36

            @AndyC1:

            I was indeed very familiar as I was the treasurer and responsible for the insurance coverage.

            And all the quotes you received excluded kitchen coverage?

    • 

      brad1-8tsi on 02/06/2022 - 21:33

      +1

      How could the kitchen be covered? I was always told that strata's responsibility ends between the plasterboard and the paint.

      Every apartment in my complex was built the same. I still have the same cheap kitchen that the developer installed.

      Other apartments have been upgraded at the owner's expense. My neighbour is currently having a $40k kitchen installed in an area only 4mx4m.

      Why would the strata have to take on the risk of an expensive kitchen?

      • 

        salmon123 on 02/06/2022 - 22:18

        How could the kitchen be covered?

        See above comment about turning the apartment upside down and shaking it. Anything that's fixed to the walls/foor (except floating floors) is part of the building. The same principle applies to house building insurance.

        Why would the strata have to take on the risk of an expensive kitchen?

        The basic kitchen would be covered by the basic policy. The 40k upgrade would be covered by the lot holders improvement cover (if the strata has taken up this option). There's a chance that the lot owner would be left out of pocket for the 40k upgrade, if it's not covered by the building insurance.

        It's unlikely contents insurance (what most lot owners take out) would cover the kitchen in a strata complex.

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  holdenmg on 02/06/2022 - 18:36

  This: https://www.terrischeer.com.au/