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I have purchased an investment property and wondering should I take out Contents Insurance even though the property is rented? It is a duplex so already pay Strata Levies.The reason these thoughts came to my mind and questioning taking out Contents Insurance by Owner of Investment Property was that in the past few weeks, coincidently, 2 sets of friends of mine have had burst water pipes within their OWN properties – flooding everywhere – so that got me thinking about what if that happened in a Rental Property – with ‘contents’ belonging to the Renters??Would Strata Insurance cover such an incident? However, I have been led to believe that Strata Insurance is only for ‘outside’ damage and Contents Insurance basically means ‘turning your property upside down and whatever falls out is covered’!!!!
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What you need is Landlords Insurance which covers you for any liability of yours related to fixtures and fittings in your property.
Policies vary from company to company but our sponsors, CHU, offer one that they describe thus:
CHU Landlords insurance is insurance for strata property owners who are renting out a unit/apartment to tenants. It is important as it provides cover for accidental loss or damage to contents in your unit from events such as fire, flood or storms. It covers items such as carpets, light fittings, curtains, blinds and washing machines as well as loss of rent if the unit is unfit to be occupied. Additionally, it covers you and your investment property for malicious damage to contents/buildings caused by tenants and/or their guests. It also covers you if your tenant fails to pay rent.
You’ll find more details on CHU’s Landlord insurance policy here.
Strata insurance will generally NOT cover you for anything inside your property. Tenants should have their own home and contents insurance too.
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@JimmyT said:Strata insurance will generally NOT cover you for anything inside your property. Tenants should have their own home and contents insurance too.
Actually strata building insurance generally covers “Lot Owners’ fixtures and improvements”, eg CHU’s Residential Strata, policy 10. That includes kitchen fixtures, bathrooms fixtures etc.
It’s a compulsory part of strata building insurance in NSW, VIC, ACT and perhaps other states.
Landlords should have landlord insurance to cover what’s not covered by the strata building insurance as well as tenant protection (due to rent defaults etc).
Tenants should have contents insurance to cover their own possessions and legal liabilities (I don’t think they could get home insurance on a building they don’t own).
@Austman said:
Actually strata building insurance generally covers “Lot Owners’ fixtures and improvements”, eg CHU’s Residential Strata, policy 10. That includes kitchen fixtures, bathrooms fixtures etc.It was a very general, non-specific comment. In fact CHU’s own factsheet says strata insurance doesn’t cover anything “over the threshhold” (although their policy does cover fixtures and fittings). Sometimes it’s easier to speak in generalities so as to describe the concept rather than the detail and let the nit-picking begin when you are presented with actual policies.
Tenants should have contents insurance to cover their own possessions and legal liabilities (I don’t think they could get home insurance on a building they don’t own).
‘Home and contents’ is the name of the type of insurance policy – I was not implying that tenants could insure their home. Obviously.
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@JimmyT said:It was a very general, non-specific comment.
It’s actually legislated that lot fixtures, fittings and improvements must be covered by any compulsory strata building insurance in at least ACT, NSW, VIC. So it should apply to all strata building insurers.
For many landlords that’s adequate cover as far as lot interiors goes because in a tenanted property (unfurnished) that’s the most expensive lot interior items covered. But it’s up to the landlord..
I personally choose to take out landlord insurance in my tenanted strata properties even when they are covered by compulsory strata building insurance. But they don’t pay out until any covering strata building insurance is first claimed.