When you are looking to either buy or refinance a property, which includes an apartment, townhouse or villa that is part of a strata complex, you are usually asked to provide a Certificate of Currency.
A Certificate of Currency is a document provided by an insurance company that serves as proof of an active insurance policy. It includes key details about the policy of what is included in the property insurance policy. The certificate is evidence that a lot, unit, townhouse, villa, etc, is part of the strata scheme and therefore is adequately insured by the existing strata insurance policy.
What Is Covered In A Certificate Of Currency?
The Certificate of Currency is a summary of the insurance policy that has been taken out on the property. It will typically include:
- The policy details such as the policy number, Period of the policy i.e. commencement and expiration date and other cover in the policy such as liability to others, Voluntary Workers, Workers Compensation, Fidelity Guarantee, Office Bearers Legal Liability, Machinery Breakdown, Flood cover, Catastrophe Cover
- How much the property is insured for (which is the limit to the protection covered);
When Do You Need A Certificate Of Currency?
Typically a Certificate of Currency is needed as part of the settlement process to prove that the lot/unit is part of a strata property has current and valid insurance, and will therefore protect the interested party in the case of any damage occurring to the building structure.
Who Might Ask For A Certificate Of Currency?
Those most likely to request a certificate of currency include:
- mortgagees/lenders (Ie: Banks and finance companies),
- mortgage brokers,
- as well as solicitors and conveyancers.
You will need this document when financing or refinancing a property as the financial institution lending the money will become the “interested party” on the property. That is, they are insuring their investment in the property.
Requesting A Certificate Of Currency From Your Insurer
To request a Certificate of Currency, you can either contact your Strata Manager or insurance renewals team.
Once you have this document, you will be able to show details of what is insured and prove that the insurance is both valid and current for your lot or unit.
How Quickly Can I Obtain A Certificate Of Currency?
It’s best to request your certificate of currency as soon as you know that one is needed. Each insurance company will have different requirements and periods before they’ll be able to issue your certificate.
Why Do I Need A Certificate Of Currency For A Strata Property?
When purchasing a unit in a strata property and applying for finance, the buyer’s financial institution becomes the ‘interested party’ for the property, as the financial institution is investing their money in the property.
The Certificate of Currency is required as part of the settlement process, to ensure that the unit is part of a property which is protected from a loss normally covered by the strata insurance, such as a fire.
Types of Insurance Cover For Strata Properties
Insurance coverage for strata properties are governed by Section 161 of the Strata Schemes Management Act 2015 and typically includes a range of policies designed to protect the building, common areas, and sometimes the individual units within the property. Here are the main types of insurance coverages for strata properties:
- Building Insurance: Covers the building structure and common areas, including fixtures and fittings in common areas, against risks such as fire, flood, storm, and vandalism.
- Public Liability Insurance: Protects the owners corporation from legal liability for bodily injury or property damage suffered by third parties within the common areas.
- Contents Insurance for Common Areas: Covers contents in common areas like furniture, gym equipment, and other movable items owned by the strata.
- Fidelity Guarantee Insurance: Protects the owners corporation against fraudulent or dishonest acts by its members or employees, including theft or misappropriation of funds.
- Office Bearers’ Liability Insurance: Provides coverage for the members of the owners corporation or strata committee against claims of wrongful acts or omissions in their capacity as office bearers.
- Machinery Breakdown Insurance: Covers the repair or replacement costs for machinery and equipment in common areas, such as elevators, air conditioning systems, and pool equipment.
- Workers’ Compensation Insurance: Required if the strata employs workers, covering employees for injuries or illnesses sustained while performing their job.
- Catastrophe Insurance: Provides additional cover in the event of a major disaster that significantly increases rebuilding costs, such as after a natural disaster.
- Legal Expenses Insurance: Covers legal costs incurred by the owners corporation in defending or pursuing legal action related to the property.
- Personal Accident Insurance for Volunteers: Provides coverage for voluntary workers who might get injured while working on behalf of the owners corporation.
- Lot Owners’ Fixtures and Improvements Insurance: Covers fixtures and improvements made by individual lot owners to their units, which may not be covered by the building insurance.
It is important that unit owners obtain their own landlord insurance where tenanted and contents insurance
In New South Wales (NSW), landlords and contents insurance serve specific purposes to protect property owners and their possessions. Here’s a detailed overview of each type of insurance and their purposes:
It is important that unit owners obtain their own landlord insurance where tenanted and contents insurance
If you don’t have landlord insurance, then you could potentially be liable for repair costs to your property should your tenants (or their guests) cause damage.
In New South Wales (NSW), landlords and contents insurance serve specific purposes to protect property owners and their possessions. Here’s a detailed overview of each type of insurance and their purposes:
Landlord Insurance
Purpose: To protect property owners who rent out their residential properties. It provides coverage against various risks that may arise from renting out the property.
Key Coverages:
- Building and Property Damage: Covers damage to the physical structure of the property caused by events such as fire, storms, vandalism, and accidental damage by tenants.
- Loss of Rental Income: Provides compensation if the property becomes uninhabitable due to an insured event, such as a fire or flood, or if tenants default on rent payments.
- Liability Insurance: Protects landlords against legal liability claims if a tenant or visitor is injured on the property and the landlord is found to be at fault.
- Tenant-Related Risks: Covers malicious damage caused by tenants and legal expenses for evicting tenants.
Contents Insurance
Purpose: To protect the personal belongings and furnishings within a property. In the context of rental properties, this insurance is particularly relevant for landlords and tenants.
For Landlords:
- Protection of Furnishings: Covers items provided by the landlord, such as furniture, appliances, carpets, and curtains, against damage or theft.
- Landlord’s Personal Items: Protects personal items that may be stored in the rental property but not used by the tenant.
For Tenants
- Tenant’s Personal Belongings: Covers the tenant’s personal possessions against risks such as theft, fire, and accidental damage.
- Temporary Accommodation: Provides coverage for temporary accommodation if the rental property becomes uninhabitable due to an insured event.
Importance of Strata Insurance in NSW
- Compliance and Legal Protection: Ensures landlords meet legal obligations and have financial protection against potential liabilities and losses.
- Financial Security: Helps landlords avoid significant financial losses due to unforeseen events or tenant-related issues.
- Peace of Mind: Provides both landlords and tenants with peace of mind knowing their property and possessions are protected.
In summary, landlords and contents insurance in NSW are crucial for protecting property owners and tenants from financial loss and liability. These insurances ensure that both the physical property and the belongings within it are safeguarded against various risks, providing financial stability and peace of mind.
If you’re not sure of what level of cover you have, or if you have enough coverage, then a common rule of thumb is that ‘strata insurance stops at the apartment door‘.
This means that everything within your unit (other than some permanent fixtures such as stoves, toilets, bathtubs, etc) must be covered separately.
Choosing An Insurance Broker
Our customers are welcome to choose and work with their own insurance broker, however Jamesons Strata Management does work with a recommended broker, Coverforce.
You can read more about the Coverforce and Jamesons Partnership and our other partners here.
