Loss of Rent & Temporary Accommodation Cover in Strata Insurance Policies
In this article we dive into the crucial aspects of Strata Insurance, focusing on Loss of Rent and Temporary Accommodation Cover. These essential components provide property owners with financial protection in unfortunate circumstances, such as property damage claims that render the premises uninhabitable or unfit for their intended purpose. Let's explore these two types of coverage included in Strata Insurance policies and understand how they are incorporated to safeguard your investments.
Understanding Loss of Rent Coverage
Loss of Rent coverage is a critical aspect of Strata Insurance, especially for landlords. In the unfortunate event of property damage, such as fire, flood, or other covered perils, resulting in the property becoming uninhabitable, landlords face potential financial losses due to a lack of rental income. With Loss of Rent coverage, landlords are safeguarded against such income loss, as the insurance policy compensates for the financial shortfall during the property's restoration or repair period.
Temporary Accommodation Cover Explained
Temporary Accommodation Cover is equally significant for owner-occupiers within a strata-titled property. If the owner's residence becomes uninhabitable due to an insured event, such as a severe storm or structural damage, this coverage ensures that the owner receives financial assistance to cover the cost of temporary accommodation during the restoration process.
How Loss of Rent and Temporary Accommodation Cover Work Together
Both Loss of Rent and Temporary Accommodation Cover work in tandem to provide comprehensive protection for all stakeholders in a strata community. While landlords receive compensation for lost rental income, owner-occupiers are supported with funds for alternative accommodations until their residence is deemed habitable again. This combined coverage ensures that all members of the strata community can navigate through challenging times with financial stability.
The Importance of Building Sum Insured
The Building Sum Insured is a pivotal factor in determining the level of coverage provided for Loss of Rent and Temporary Accommodation. Insurers typically set the coverage at a generous percentage, often around 15% of the Building Sum Insured. This intentional generosity aims to safeguard property owners from potential financial losses associated with major claims, offering peace of mind during unforeseen events. According to the Insurance Council of Australia, Strata Insurance is mandatory in most states and territories, and it covers the common property that is jointly owned by the lot owners.
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This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.