The Problem We Are Here to Address
If there is nothing else you read on this website, we implore you to take a moment to read this.
Whether you are an owner of a lot in a Strata or Community title scheme, or an adviser to someone who is, there is one fundamental relationship you need to understand if you are to make informed choices around protecting the investment.
A Body Corporate, Owners Corporation, Strata Company, Community Association or other similar legal entity is what owners become members of when they buy into a Strata or Community title scheme. As a member, you share in both the assets and liabilities of the entity with all other owners registered on the scheme at that time.
However, very few owners understand the inherent exposures associated with the legal structure of these entities, including the unlimited liability of their members. Each member has a joint and several liability to the entity, and unlike a limited liability structure (e.g. like most companies) the exposure can be far higher than the amount invested. As an owner, you face additional financial contributions (or special levies) to meet unexpected debts and liabilities, and if your neighbour as a member defaults or bankrupts, then the balance of members are required to pick up the shortfall.
This is not a new situation. It’s why regulators prescribe by law that insurance must be purchased by the scheme for the benefit of all owners. Regulators of course prescribe the minimum limits of such cover, but therein lies the complexity: an inherent mismatch between the finite limits of an insurance policy, and the unlimited liability of the owners of the entity. What is not covered by insurance needs to be funded directly by owners. Can you afford an unplanned financial contribution?
That is why we exist, we get this, and it’s our expertise. Strata Community Insurance deals only in insurance solutions for Strata Communities, with best in class products providing protection for owners well beyond the minimum limits required by law. We exist to protect your asset, to reinstate its amenity following a fortuitous event, and to reduce your financial exposure. With our experience, passionate team and personalised approach we simplify the insurance process for you. The strength of experience – we are here for you.