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Property Management

The importance of Landlord Insurance, and adequate Building & Contents insurance for strata-managed properties

The importance of Landlord Insurance, and adequate Building & Contents insurance for strata-managed properties

The importance of Landlord Insurance, and adequate Building & Contents insurance for strata- managed properties

Owning property within a strata-managed complex offers many benefits, but it also introduces layers of complexity—especially when it comes to insurance. Many landlords assume that the strata’s building insurance covers everything, but that assumption can be costly.

Understanding the scope and limitations of strata insurance, building insurance and landlord insurance is essential for protecting your investment. In this article we cover:

  • Why Landlord Insurance is essential,
  • The Grey Areas of Strata Building Insurance
  • Contents Insurance, and
  • Final Thoughts and Recommendations

Why Landlord Insurance Is Essential

Landlord insurance is tailored to the unique risks of renting out property. It typically covers:

  • Loss of rental income due to tenant default or property damage
  • Liability claims if someone is injured on the premises
  • Damage caused by tenants, including accidental or malicious acts
  • Contents which can typically include electrical appliances, floating floorboards, carpets, plants/hedges, curtains and blinds, your furniture if the property is leased furnished.
  • What is Not Covered: Any type of loss or damage to the building caused by any person that is not your tenant or their guest or by any external event, is typically not covered and requires Building Insurance.

This coverage fills the gaps left by strata and standard building insurance, ensuring landlords aren’t left financially exposed.

The Grey Areas of Strata Building Insurance

Strata insurance usually covers the building’s structure and common areas—but the definition of “building” can vary significantly between policies. Common points of confusion include:

  • Flooring: Many strata policies only cover original flooring (e.g., tiles installed by the developer). Items like floating floors, carpet or upgraded flooring may not be covered unless specifically noted.
  • Fixtures and fittings: Items like kitchen cupboards, benchtops, or bathroom vanities may or may not be considered part of the building. In some cases, owners have discovered that their kitchen cabinetry was excluded from strata coverage.
  • Roofs and balconies: Responsibility for roof repairs or balcony maintenance can be disputed, especially in top-floor units or where exclusive-use areas are involved, or in older properties where roofs have had significant wear and tear over the years.

These grey areas can lead to delays, disputes, or denied claims—especially during emergencies.

Contents Insurance: Protecting What’s Inside

Even if the building is insured, landlords are responsible for:

  • Furnishings and appliances provided to tenants
  • Internal upgrades not covered by strata (e.g., new flooring, light fixtures)
  • Accidental damage or theft within the unit

Contents insurance ensures these items are protected, especially in furnished or short-term rental properties.

Final Thoughts

Strata insurance is not a one-size-fits-all solution. Landlords must:

  • Take Building Insurance alongside Landlord Insurance in the event of a standalone rental home.
  • Review the strata policy to understand what is and isn’t covered and the applicable excesses.
  • Clarify definitions of “building” and “fixtures”
  • Take out landlord and contents insurance to cover personal liabilities and property-specific risks