Queensland’s recent series of flooding, cyclones, freak storms has demonstrated how important it was to have property insurance. How much insurance do you really need?
Insurance on contents and buildings
It is crucial for:
- Owner-occupiers
- Investors in property
This is the policy you’ll need to cover the actual bricks and mortar of your property (building), along with its chattels, such as carpets, tiles and curtains (contents).
It’s quite common for homeowners to get a combined building and contents policy, although it is possible to get separate policies that just cover the building’s structure or the contents.
The prices and coverages of policies can vary widely, so make sure you read all terms and conditions.
“Some policies might appear to offer good value for money, but after factoring in excesses and other expenses, it might cost you more in the long run if you have to make a claim,” says Terri Scheer Insurance Manager, Carolyn Majda.
Landlords Insurance
It is crucial for:
- Only property investors
If you own an investment property, you’ll need to look at buying a specific landlords insurance policy in addition to your building and contents insurance.
“A standard building and contents policy won’t usually cover landlords for the specific risks associated with owning rental property,” Majda says.
This includes tenant intentional damage and accidental damage. It also covers legal liability for events that result in bodily injury or death.
“Landlord insurance is designed to protect investors against these specific risks,” Majda adds.
“Uninsured landlords really need to think about how they would manage financially if they were faced with thousands of dollars worth of damage to their rental property, or were unable to re-let their property while repairs were being made.”
Strata Insurance
It is crucial for:
- Apartment owner, investor or owner-occupier
Apartment owners – both investors and owner-occupiers – will find that they need a strata insurance policy as well, but in most cases, this is handled on your behalf by the body corporate manager.
Strata insurance often comes with building insurance for the entire apartment block. Strata insurance is held by the body corporate and paid for by your quarterly owners’ levies.
“Under a strata title, the body corporate is legally responsible for insuring the buildings at the strata-title site, as well as the owner’s legal liability for common property areas,” Majda says.
“This includes insuring the roofing, external walls and the owners’ legal liability for shared walkways and garden areas.”
As an apartment owner, however, it’s important that you organise your own contents insurance and landlords insurance policies.
“If a tenant or visitor injures themselves in a common area of the premises such as a shared walkway, any subsequent legal liability claim should be handled by the strata insurance,” Majda says.
“But if a tenant or visitor injures themselves while they are inside a rented apartment, it is the landlord who can be found liable.”
