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Heritage listing is crucial for preserving Australia's cultural and historical heritage, but it can affect strata insurance. The restrictions placed on heritage buildings can affect their insurability, leading to higher insurance premiums and additional requirements for strata property owners. This article explores the impact of heritage listing on strata insurance in Australia.
Heritage listing is the recognition given to a property or place due to its historical, architectural, or cultural significance. It will generally be granted by a government body that is responsible for the identification and protection of these properties within the relevant state. In Victoria, for example, Heritage Victoria assesses properties based on specific criteria, including their age, architectural significance, historical associations, rarity, and integrity.
Heritage listing will provide legal protection for the property, meaning any changes or alterations will usually require authorisation from the relevant authorities. These controls are in place to ensure that works completed will not compromise the heritage value of the property and are carried out in a sensitive and responsible manner.
Heritage overlay is a planning mechanism used to protect heritage-listed properties within local council areas. It is a set of restraints that are applied to properties or areas of historical or cultural significance. Heritage overlay typically includes planning regulations, guidelines, and development controls that aim to preserve the heritage values of the area.
Heritage overlay can impose restrictions on various activities, such as demolition, alterations and developments, to ensure that any changes made are in accordance with the heritage significance of the property or area. These restrictions can include requirements for maintaining the original architectural features, using traditional building materials, or obtaining specific permits or approvals for modifications.
While these protections help to preserve Australia's cultural and historical heritage, they can also impact strata insurance in several ways. Insurers may consider the building a higher risk due to higher repair or restoration costs, or limitations on the use of certain materials or building techniques that may be required in the event of damage or loss.
For example, a building constructed in the early 1900s may use a type of masonry commonly used at the time which is no longer freely available. As a result, the restoration of damage using original materials, or the nearest modern equivalent, is a much more complex exercise and more costly for the insurer managing the claim. This could result in higher premiums for the strata insurance policy.
If a property is not heritage listed but it has a heritage overlay, it can still result in increased premiums as a property included in a heritage overlay can have the same requirements as a heritage-listed property. While properties with heritage listings and heritage overlays are different types of protection, they both come with legal obligations and restrictions on building alterations, which can result in additional premiums.
It is important for your insurer to know if your property is heritage listed. Based on your location, this information can be found at the following sites:
In the event that your strata property is of historical significance, it is crucial for Strata Managers and the Committee to work closely with their insurance provider/broker to ensure that their policies adequately protect the building and its heritage features.
Client Executive • Strata Insurance & Risk Solutions
Client Executive • Strata Insurance & Risk Solutions
