One cannot always predict the future, and even when one can, it is not always completely accurate. Planning for the future takes a lot of consideration and careful thought, in addition to large amounts of information required to make informed decisions. While you might make every effort to plan as accurately as possible, you cannot account for every eventuality, hence the need for backup plans and consideration of contingencies.
The most common form of planning for future possibilities is the purchase of insurance. There are numerous types of insurance cover to protect equally varying issues. There is health, car, home, renters, travel insurance, and many more. Insurance covers offer you some form of financial protection in the case of misfortune. One of the major types emerging today is catastrophe cover. The world seems to be getting more and more unpredictable. One never knows when their apartment, an investment, is affected by a catastrophic event with the potential to wipe it out completely.
Some of the more notable catastrophes experienced in Australia in recent times are major storms and large wildfires that left devastation in their wake.
In terms of catastrophe cover for apartment owners, the collective aspect of the strata community does come to mind. Through the owners’ corporations, strata communities must remain well aware of what options they have available in terms of adequate cover if the worst-case scenario were to play out.
What does adequate cover entail? Much more than you think. Most policies do not offer as much as strata communities believe they do. You may find that your community barely has any catastrophe cover, or if there is one, it is not as robust as is ideal. Queensland Strata Community Association President Simon Barnard posits that the standard insurance policy does not actually cover catastrophic events like bushfires and cyclones predicted to be seen in the summer.
Why get catastrophe cover?
It is better to have a policy that explicitly provides a cushion against the more severe events that may take place. The more cover that you are able to get, the better your recovery efforts will be. More often than not, the effects of natural disasters are not adequately covered in more standard insurance policies. Even when a specific catastrophe policy is taken up, coverage may only account for damages to a certain limit.
Strata communities are more aware of the position they are in regarding protection and recovery after a major adverse event. It is why they are encouraged to seek only those policies that are robust in their coverage. Even those communities that feel as though this exercise is unnecessary as they already have a policy in place are asked to take a second look at what is already on their books and not hesitate to undertake a more in-depth search for a favorable policy.
One thing that may put strata communities off looking into and signing up for catastrophe cover is the cost. While it will certainly have an impact on their finances, better insurance against damage that comes about from bushfires, cyclones, earthquakes, floods, and the like is vital. The destruction these events can bring about will prove more costly to repair for those with basic coverage than other communities with proper insurance coverage.
Body corporate managers and individual apartment owners alike are highly encouraged to have a frank discussion of their insurance policy coverage and whether they are happy with what they already have. If not, it is essential to take a look at what policies and their corresponding catastrophe cover are available through your local insurance companies.