What is apartment insurance?

There are several reasons it’s important to get insurance for your apartment.

1. An apartment is a valuable investment that, as a landlord, you wouldn’t want to risk losing. If your apartment was damaged or destroyed, could you afford to rebuild it out of your own pocket?
2. What about the contents inside? You could have thousands of dollars’ worth of possessions in your apartment, and without insurance, you would have to cover the replacement costs or cost of repairing yourself.
3. Just because you’re living in an apartment doesn’t mean it isn’t still susceptible to damage or vandalism, and the contents inside it could still be stolen.
4. If you’re renting your apartment to tenants, landlord insurance can protect you from liability if your tenants or their visitors are injured within your property. This can save you from potentially expensive legal fees.
5. If you’ve chosen this as an optional extra, landlord insurance can also cover your losses if your tenant defaults on payments or can’t pay their rent.
6. Some landlord insurance policies may even offer optional extras that can cover malicious damage that your tenants could cause to your apartment.

If your apartment is under strata title and you’re paying body corporate fees, your body corporate legally must take out strata insurance which covers the entire building or complex. In that case, there would be no need for you to take out your own home/building insurance policy. Your strata insurance generally covers your building, external walls, gutters, balcony, ceiling and shared facilities, such as:

• Common areas
• Elevators and stairways
• Gardens and gardening equipment
• Car parks
• Tennis courts
• Swimming pools.

However, if required, you’ll need contents insurance to cover the fixtures and fittings inside your apartment, as well as your personal belongings (e.g. furniture, appliances and carpets).

If you pay body corporate fees, the building’s strata insurance can cover you for damage to your apartment’s structure, depending on the policy. However, you might want to consider taking out a Landlord’s policy with contents coverage to protect any furnishings you provide or belongings you may have left with the apartment.

As well as standard coverage inclusions such as fire and storm damage, some insurance providers might offer optional extras to add to your landlord insurance. These extras can cover you if your tenant defaults on their rent and legal liability (if someone is injured in your apartment and you’re at fault). Some landlord insurance policies may even offer cover for malicious damage to your rental property caused by tenants. If you’ve left appliances and furniture in your leased-out apartment, a contents insurance policy can protect them against malicious damage or theft by a tenant (if this cover is added to your policy) – just be sure to check whether your landlord insurance covers contents or if you would need to purchase contents coverage in addition to your landlord insurance.

As an apartment owner, the responsible thing to do is protect your investment property.

If you’re a tenant in an apartment, you won’t need to take out insurance for the structure of the apartment itself – that’s the responsibility of the owner/body corporate. However, you will be responsible for protecting your personal belongings from damage and theft, which you can do with a contents insurance policy.

Damage to the building (e.g. external walls and balconies) or shared facilities (e.g. swimming pools, common areas, lifts and car parks) is typically covered through strata insurance, which is paid for through body corporate fees.

No, claims for building defects or faults are generally not covered by any type of insurance; most, if not all, insurance policies typically have a defects exclusion.

There are several factors that can affect the cost of your contents insurance premium. These factors may include:

• The value of your belongings
• How secure your apartment is
• The age and structure of your apartment
• The oldest person living in it
• Risks of natural hazards

You can potentially reduce the cost of contents insurance for your apartment if you:

1. Live in an apartment or building that has tight security. The harder it is for burglars to get in, the less chance your belongings will be stolen.
2. Live on a higher floor. Apartments on lower floors may have a higher chance of being broken into, as they are more convenient to access.
3. Live in a certain suburb. Apartment buildings located in suburbs with a lower crime rate may seem like a safer bet to insure.
4. Live in a newer building. Your insurer will look at the age of your building and the materials used in its construction to determine its risk of withstanding damage.
5. Choose a higher excess. If your insurer allows you the choice of paying a higher excess when you need to make a claim, this can reduce your premium. Just keep in mind that you’ll need to pay this amount should you claim.