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Comparing Landlord and Residential Strata Insurance: What You Need to Know

Securing the right insurance is an important part of property ownership. For landlords and strata property owners, understanding the difference between landlord insurance and residential strata insurance is crucial. Each serves a unique purpose, designed to address specific property leasing and communal living risks. 

This article will help to provide an understanding of both Landlord Insurance and Residential Strata Insurance — highlighting the differences, similarities, and how to choose the appropriate coverage for property owners.

What is Landlord Insurance?

Landlord insurance is a type of insurance policy designed specifically for individuals who own investment properties and rent them out to tenants. 

This insurance provides coverage for risks that are typically associated with rental properties, such as damage to the property caused by tenants, loss of rental income due to tenant defaults, liability protection for accidents that occur on the property, and legal expenses related to tenant disputes or eviction proceedings. 

Landlord insurance comes in handy, especially during tough times or unexpected situations that might impact your tenants' finances. Accidents happen, and as a landlord, you could end up on the hook for any injuries your tenants or guests suffer on your property. But fear not! Landlord insurance has your back with liability protection. That means it covers legal costs and medical bills if you get encumbered with a lawsuit over injuries or property damage. 

Renting out your place also means dealing with legal obligations and potential clashes with tenants. Luckily, landlord insurance often foots the bill for legal expenses, including lawyer fees, if you need to evict unruly tenants or fix up any property damage.

What is strata insurance?

Residential strata insurance is a specialised form of property insurance tailored for strata schemes such as apartment complexes, townhouse groups, and sets of units. Unlike landlord insurance (which is focused on individual properties), residential strata insurance provides a structured and collective approach to risk management, spreading the risk fairly among all property owners within a shared environment. It's like having a safety net for unexpected events – making sure everyone pitches in for peace of mind.

Residential strata insurance covers everything from lobby areas to shared gym spaces, and even the building structure itself – from basement to rooftop. Strata Insurance is essential for protection of the entire property, whether it's damage to shared walls, roofs, or floors. It ensures that all property owners within the strata scheme share the financial burden of repairs or reconstruction.

Plus, it’s  mandatory to have strata insurance in Australia, and owners must legally take out a strata insurance policy for their strata property.  

The difference between landlord insurance and strata insurance

Landlord insurance protects individual rental properties, while strata insurance covers shared areas and assets in community-owned properties.

Whether you need landlord insurance as well as residential strata insurance depends on your specific circumstances and the type of property you own, which we’ll outline in the below sections.

Comparing landlord and strata insurance: Differences and similarities 

Scope of protection:

  • Landlord insurance: Primarily focuses on the individual property leased out, providing coverage for damages and rental income loss.
  • Residential strata insurance: Takes a collective approach, covering common areas and the building structure shared by all property owners in a Strata Scheme. Strata insurance does not provide coverage for owners or landlords personal belongings/contents and furniture within their property.

Individual vs. collective responsibility:

  • Landlord insurance: Individual landlords bear the responsibility for obtaining coverage for their specific property.
  • Residential strata insurance: Involves collective responsibility, with all property owners contributing to the shared insurance that protects common areas.

Premium considerations:

  • Landlord insurance: Premiums are based on the individual property's value and rental income potential.
  • Residential strata insurance: Premiums are based on the cost to fully repair or rebuild the property and are distributed among all property owners, often through strata levies.

Claims process and management:

  • Landlord insurance: Landlords typically handle claims directly with their insurance provider, addressing issues specific to their property and tenants.
  • Residential strata insurance: Claims involving common areas are managed collectively by the strata committee or management agency, ensuring consistent procedures and resolutions for all property owners.

How to choose the right coverage for your needs

If you own a rental property that is part of a strata scheme, you will likely need both types of insurance. Landlord insurance will protect your individual unit and contents, including fixtures, fittings, and any landlord-specific risks like loss of rental income or tenant damage. On the other hand, residential strata insurance will cover common areas, shared facilities, and the building structure itself, distributing the risk among all property owners in the strata scheme.

Considerations for landlords and strata owners:


  • Assess the value of your property contents and the potential risks associated with renting it out.
  • Consider the geographical location and prevalent weather conditions when determining coverage.
  • Evaluate the financial impact of potential rental income loss and ensure your insurance adequately addresses this concern.
  • Consider the need for Landlords insurance especially if your property is located within a strata complex to protect your property contents which are not covered under a strata insurance policy.

Strata owners:

  • Understand the collective nature of strata living and the shared responsibility for common areas.
  • Regularly review and update Residential Strata Insurance to accommodate changes in the cost of repairing or rebuilding.
  • Collaborate with fellow property owners to ensure comprehensive coverage for all shared spaces.

Get information from Flex Insurance

Finding the perfect insurance isn't just about picking a policy; it's about protecting your property effectively. Every policy is different. Whether you're a landlord looking out for your property or part of a strata community safeguarding shared spaces. Grasping the ins and outs of landlord and strata insurance is key. 

To discuss your strata insurance needs, contact Flex Insurance today.