Strata unit landlord insurance fills the space between the scheme’s building policy and the tenant’s own contents cover. The owners corporation or body corporate insures the building and common property. The tenant insures their own belongings. Everything in between is yours to arrange: the fixtures you own, your rent, damage by tenants, your improvements and incidents inside the lot. This guide sets out what that usually means for investors. Our home and contents page covers the underlying contents cover.
Start With the Strata Policy
Before you arrange anything, find out what the scheme’s policy does. Ask the strata manager for the certificate of currency and the policy wording or summary, then check:
- How the building is defined, and whether lot owners’ fixtures and improvements fall within it.
- Whether the scheme policy includes any section for lot owners, such as loss of rent after insured damage.
- The excess, and how the scheme’s by-laws or resolutions allocate it.
- Whether the scheme has flood cover, if that matters where the building is.
Our pages on what strata insurance is and residential strata insurance set out what scheme policies typically include.
Fixtures and Contents You Own
Even an unfurnished rental contains items the owner owns. Where the line falls between building and contents depends on the state, the scheme and the policy wording. Items that commonly need checking:
- Carpets and floating floors.
- Blinds, curtains and light fittings.
- Dishwashers, ovens, cooktops and rangehoods.
- Split-system air-conditioners within the lot.
- Furniture, beds and appliances in a furnished rental.
Landlord policies commonly include a contents section for the owner’s items. Set the sum insured at what it would cost to replace them today, and review it when you refurbish.
Loss of Rent
Two different events can stop the rent:
- Insured damage. A fire or major leak leaves the unit unlivable. Landlord policies commonly pay lost rent for a period while repairs are made, subject to limits. Some scheme policies include a similar section, so check for overlap before paying for it twice.
- Tenant default. The tenant stops paying or leaves without notice. Some landlord policies include a benefit for rent default, usually with conditions about the lease, the bond, rent reviews and how quickly arrears are acted on.
Landlord policies commonly require a written lease, a bond and regular inspections, and some ask whether the unit is managed by a property manager. Meet the conditions every time, not only at the start of a tenancy.
Tenant Damage
- Accidental damage. A tenant cracks a benchtop or stains a carpet. Some landlord policies respond, subject to the excess and limits.
- Malicious damage. Deliberate damage by a tenant or their guests. Commonly a separate section with its own conditions.
- Wear and tear. Not insured. Carpet worn by years of use is a maintenance cost.
Where tenant damage affects the building structure or common property, the scheme policy may respond instead, with the excess allocated under the by-laws. Detailed entry and exit condition reports, with dated photographs, are the evidence that settles these claims.
Improvements and Renovations
If you have replaced the kitchen, retiled the bathroom or laid new flooring, find out whether the scheme’s building policy picks up those improvements. In some schemes it does, and in others owners’ improvements sit outside it or are limited. Tell the strata manager when works are finished, keep the invoices, and check whether your own policy has a section for lot owners’ fixtures and improvements.
Liability Inside the Lot
The scheme’s public liability is designed around common property. An injury inside your unit, such as a tenant’s guest hurt by a faulty fitting you are responsible for, is commonly a matter for the owner’s policy. Landlord policies commonly include legal liability as owner of the unit. Check the limit and read any exclusions that apply to tenanted property.
Your Share of a Strata Excess
When a leak starts in your unit and damages units below, the scheme may lodge a claim, and the by-laws or a resolution may allocate the excess to you. Some landlord and contents policies include a benefit for a strata excess you are asked to pay; check whether yours does and what it is limited to. See our guides to strata water damage and the strata claims process.
Vacancy Between Tenancies
An empty unit carries different risks: a slow leak can run for weeks before anyone notices, and there is no one to report a break-in. Policies commonly restrict or suspend some cover once a property has been unoccupied for longer than a set period. Know the period in your wording, tell your insurer if the unit will sit empty while it is renovated or sold, and arrange regular inspections in the meantime.
Working With Your Property Manager
A property manager holds much of the evidence a landlord claim depends on: the lease, the bond records, rent ledgers, arrears notices, routine inspection reports and entry and exit condition reports. Ask your manager how quickly they act on arrears and how they record damage, because those practices can decide whether a rent default or tenant damage claim is paid. If you manage the unit yourself, keep the same records to the same standard.
Short-Term and Holiday Letting
Landlord policies are commonly designed for residential leases. Short-term letting through booking platforms brings more guests, more turnover and different risks, and may need a different policy. By-laws may restrict it as well. Tell your insurer and the strata manager before you list the unit.
Strata Unit Landlord Insurance Checklist
- Get the scheme’s certificate of currency and policy summary.
- Confirm which fixtures and improvements the scheme policy includes.
- Insure your own fixtures and furnishings at replacement cost.
- Choose loss of rent and tenant damage cover that fits how the unit is let.
- Check your liability limit and any strata excess benefit.
- Keep leases, condition reports and inspection records.
Common Questions
Will the strata policy pay my rent if the building is damaged?
Some scheme policies include a loss of rent section for lot owners, with limits. Check the policy summary, and do not rely on it until you have read it.
My tenant has contents insurance. Do I still need contents cover?
The tenant’s policy is for the tenant’s belongings. Your fixtures and furnishings need your own cover.
I live in the unit myself. Does this apply to me?
Owner-occupiers generally need home contents cover, including their fixtures and improvements, rather than landlord cover.
Talk It Through
Request a home and contents quote or call 1300 983 940 to talk through the cover inside your unit. If you sit on your scheme’s committee, you can also request a strata quote for the building. More on home and contents insurance.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.