Standard Strata Insurance and the Importance of Market Value Cover
Standard property insurance for strata complexes is designed to cover physical damage caused by events like fire, storms, or other insured disasters. But in certain cases, damage is only part of the problem. If a strata building is destroyed, the standard insurance policy typically covers the cost to rebuild the property as it was, provided the law still allows it.
However, if zoning laws have changed and the original structure can’t be legally rebuilt, or you’re no longer permitted to build the same number of units as before, then the market value of the property may drop significantly. That loss in value is not covered by standard strata insurance.
Protecting Your Strata Property with Loss of Market Value Insurance
Loss of market value insurance covers the difference between the original value of the strata property (before it was destroyed), and what the property is worth after the loss, with the new zoning laws. The gap in market value can be substantial, especially in coastal or environmentally sensitive areas where rezoning could impose stricter limits.
At Lync Insurance, our strata specialists are experienced in navigating complex zoning law issues across Western Australia. Get in touch with our team to find out whether loss of market value insurance is right for your strata property and how it could help protect your long-term investment.
