Block of Units Insurance
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What is Block of Units Insurance?
Block of Units Insurance is a specialised policy designed for owners of multi-unit residential buildings, such as apartment complexes or townhouses, where the entire property is under single ownership.
Unlike Strata Insurance, which covers buildings with multiple owners under a strata title, Block of Units Insurance is for properties where one entity owns all the units.
Why Do You Need Block of Units Insurance?
Owning a block of units means you’re responsible for the entire property, from the building structure to shared spaces including hallways, stairwells or gardens.
Here’s why Block of Units Insurance is a must:
01
Protects Your Investment: Your property is a valuable asset. Insurance covers repair or rebuilding costs if your building is damaged by events such as fires, storms or vandalism.
02
Covers Liability Risks: If a tenant or visitor is injured on your property due to a maintenance issue, say, a slippery staircase, you could face legal claims. Liability coverage helps manage these risks.
03
Ensures Tenant Satisfaction: Keeping your property in good condition with insurance-backed repairs means tenants are more likely to stay, reducing vacancy rates.
04
Meets Legal Requirements: In some states or territories, certain insurances, like Public Liability, are critical to comply with regulations and protect your business.
What Does It Include?
A comprehensive Block of Units Insurance policy can be tailored to your property’s needs.
It typically includes:
Building Coverage: This protects the physical structure of your property, including walls, roofs and fixed fixtures such as air-conditioning units or solar panels. It covers damages from insured events (e.g., fire, storms or earthquakes).
Public Liability: Covers legal and compensation costs if someone is injured or their property is damaged due to an issue on your premises, such as a fall in a common area.
Loss of Rent: If your units become uninhabitable due to an insured event (e.g., fire), this coverage compensates for lost rental income during repairs.
Contents in Common Areas: Covers items in shared spaces, like furniture in a lobby or equipment in a communal laundry.
Removal of Debris: After an insured event, this covers the cost of clearing debris, which can be significant. Some policies include this automatically, while others require it to be added to your building sum insured.
Optional Extras: Depending on your property, you might consider adding coverage for flood damage, machinery breakdown (e.g., lifts) or legal expenses.
How is Block of Units Insurance Different from Strata Insurance?
The key difference lies in ownership:
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Block of Units Insurance
For properties where one owner or entity owns the entire building. You’re responsible for insuring the whole property, including all units and common areas.
Strata Insurance
For buildings with multiple owners under a strata title, where the owners’ corporation manages shared areas, and individual owners may insure their own units.
If your property has multiple owners, you’ll need Strata Insurance instead.
Key Considerations When Choosing Block of Units Insurance
Here are the things to keep in mind:
01
Accurate Sum Insured: Work with a broker to calculate the full replacement cost of your building, including unique features such as lifts. Underinsurance could leave you out of pocket after a claim.
02
Policy Exclusions: Check what’s not covered, such as wear and tear or unoccupancy clauses, which could affect coverage if units are vacant for long periods.
03
Insurer Reliability: Choose insurers with a strong track record. Reach out to an insurance broker for assistance. Brokers work with a panel of Australian-approved insurers so they’ll be able to find reliable, competitive options that fit your needs.
04
Claims Support: A good broker can help you manage your claims, liaising with insurers to ensure a smooth process and fair outcome.
05
Compliance with Regulations: Ensure your policy complies with local laws, such as mandatory Public Liability Coverage.
How to Get Started
Ready to protect your block of units?
Here’s what you can do:
Contact an Insurance Broker
Reach out to an insurance broker via phone, email or online form.
Share Your Details
Provide information about your property, such as its size, location and features, so your needs can be assessed accurately.
Receive Tailored Quotes
Compare options from a panel of insurers. Make sure to look at clear, competitive choices.
Choose Your Policy
An insurance broker will explain each option to you, helping you select the coverage that fits your budget and requirements.
Stay Protected
With your policy in place, a broker can provide you ongoing support, from renewals to claims.
Frequently asked questions
Can Block of Units Insurance cover heritage-listed buildings?
Yes, but heritage-listed buildings require special consideration. These properties often have unique features, like ornate facades or specific materials, that increase replacement costs. You’ll need a policy with a sum insured that reflects these costs and some insurers may require a professional valuation. An insurance broker can source policies from insurers experienced with heritage properties to ensure adequate coverage.
What happens if my block of units is partially occupied?
Most policies include unoccupancy clauses, typically limiting coverage if the property is vacant for 60 to 90 days. Partial occupancy (e.g., some units rented, others vacant) may not trigger this clause, but you should notify your insurer to confirm.
Does Block of Units Insurance cover tenant damage to the property?
Standard policies don’t cover deliberate or negligent tenant damage (e.g., vandalism or misuse). However, you can add Landlord Insurance as an optional extra to cover tenant-related damage or unpaid rent. You can work with a broker to combine Block of Units Insurance with Landlord Cover for comprehensive protection.
Can I get coverage for short-term rentals like Airbnb in my block of units?
Yes, but short-term rentals introduce additional risks, such as higher wear and tear or liability issues from frequent guests. Not all insurers cover short-term rentals under standard Block of Units Insurance policies, so you may need a tailored policy or additional endorsements.
What if my block of units has mixed-use spaces, like retail shops?
Mixed-use properties (e.g., shops on the ground floor, apartments above) require specialised policies as retail spaces introduce unique risks including higher foot traffic or equipment damage. Your policy must cover both residential and commercial elements.