Why Owners Corporation Insurance is Important

Being a strata owner comes with many responsibilities not just for your individual unit but for the whole property. One of the most important parts of managing a strata property is getting comprehensive Owners Corporation Insurance. At ACE, we understand the complexities of managing a strata property and the peace of mind that comes with having insurance.

While Owners Corporation insurance covers common areas, individual owners still need their own insurance for their lots, such as contents or landlord insurance. Although it’s not the responsibility of the Owners Corporation or the Owners Corporation Manager, your strata manager can offer advice on how to find out more about securing the appropriate coverage.

Here’s why Owners Corporation Insurance is important and how it benefits everyone in the strata community.

Common Property Damage

Owners Corporation Insurance, also known as strata insurance, covers common areas and property shared amongst unit owners. These areas can include gardens, swimming pools, car parks, lifts, and the building. Damage to these common areas can be expensive, and while insurance can only cover damages that are covered by the policy, the cost could fall on the owners. This insurance aims to cover replacement and reinstatement costs if there is a fire, storm, or vandalism, so owners, subject to any excess or private lot principles, shouldn’t have to pay out of pocket.

Liability

Another important part of Owners Corporation Insurance is liability. This type of insurance protects the owners corporation from legal liabilities that may arise from injuries or damages in common areas. For example, if a visitor slips in the lobby, the liability insurance helps manage the legal costs and any claims. At ACE, we stress the importance of this coverage as it protects the owners corporation from expensive legal bills.

Financial Protection

Strata management involves managing finances tightly. Unexpected events can  blow the budget if not insured. Owners Corporation Insurance helps maintain financial stability by covering large unexpected costs for damages and events specified in the policy. This insurance can assist in offsetting costs when dealing with emergencies, ensuring funds are available without imposing extra levies or charges on unit owners. Financial certainty is essential for any body corporate to run smoothly.

Compliance with Regulations

In many areas, having Owners Corporation Insurance is not just a recommendation but a legal requirement. Compliance with these regulations is important to avoid penalties and legal issues. At ACE, we ensure all our managed properties comply with the local laws regarding strata insurance. This compliance protects the owners and the body corporate’s reputation.

Peace of Mind

One of the most underrated benefits of Owners Corporation Insurance is the peace of mind it gives. Knowing the property is covered for various risks means owners can enjoy their investment rather than worrying about the what ifs. At ACE, we believe peace of mind is priceless and we try to give it to you through our insurance solutions tailored to each property.

Increasing Property Value

Well managed strata properties with proper insurance coverage generally have higher property values. Prospective buyers and investors look favourably on properties that are well insured as it means they are managed well and less financial risk. By insuring your strata property, you are not only protecting your investment but potentially increasing its value.

The body corporate is obliged to conduct routine building valuations to ensure adequate coverage. Your ACE manager can advise on timely valuation reviews, particularly when building costs rise. To protect the value of internal upgrades, lot owners should refer to body corporate rules and seek approval before renovating. A body corporate insurance policy typically aims to repair and replace like-for-like in reinstatement scenarios.

Running Smoothly

Owners Corporation Insurance is an integral part of the day-to-day management of a body corporate. It allows for smooth running by ensuring any damage or issues can be dealt with quickly without long drawn out financial discussions. At ACE, we handle claims and insurance matters efficiently so there is minimal disruption to the residents and the property.

Additionally, insuring collectively provides significant advantages in the event of an incident. It allows for the coordination of trades and streamlining of work across various lots, resulting in greater efficiencies. This means avoiding delays caused by waiting for different insurers to respond to claims or for various trades to arrive, ultimately speeding up the entire process.

Strata Manager’s Role in Owners Corporation Insurance

A strata manager is responsible for the implementation of Owners Corporation insurance. As insurance is a financial service, it has additional legislative requirements. At ACE, we ensure all insurance matters comply with these regulations. We support you with claims and keep coverage up-to-date. Read more about how Owners Corporation Managers assist with obtaining insurance and processing claims in our next blog.

Having proper insurance is essential for understanding and managing a body corporate effectively. It is an important part of how a body corporate works, so all legal and regulatory obligations are met. ACE can guide and support you in navigating how Owners Corporation Insurance works so the body corporate runs smoothly and in compliance with all relevant laws.

Summary

Owners Corporation Insurance is the foundation of good strata management. It covers common property damage, liability, financial stability, compliance with regulations, and peace of mind. At ACE, we know how important this insurance is and will help our clients get the best coverage for their properties.

Investing in Owners Corporation Insurance is not just about protecting the property; it’s about having a future free of unexpected financial burdens and legal issues. For strata management and advice on getting the best Owners Corporation Insurance, contact ACE today. Let us help you protect your investment and the harmony of your community.