Strata Insurance Guide
Understanding strata insurance, body corporate responsibilities, and unit owner coverage requirements. Essential guide for apartment and unit owners in Australian strata title properties.
Important Note
This guide provides general information about strata insurance in Australia. Strata laws vary significantly between states and territories. Coverage and requirements differ between insurers and body corporates. Always read your strata bylaws and insurance policies carefully, and consult with your strata manager or insurance professional.
What is Strata Insurance?
Strata insurance is a specialised form of building insurance that covers common property in strata title buildings such as apartment blocks, unit complexes, and townhouse developments. It's taken out by the body corporate (also called owners corporation or strata corporation depending on your state) and covers areas owned collectively by all unit owners.
This insurance is separate from individual unit contents insurance and may not cover everything within your unit. Understanding the division between body corporate insurance and your personal insurance responsibilities is crucial for adequate protection.
Key Legal Requirement
In all Australian states and territories, body corporates are legally required to maintain building insurance for the common property. This is not optional - it's a legal obligation under strata legislation. Individual unit owners cannot opt out of this shared insurance.
What Strata Insurance Typically Covers
- • Building structure and external walls
- • Common areas (lobbies, hallways, stairwells)
- • Shared facilities (pools, gyms, BBQ areas)
- • Lifts, intercoms, and common utilities
- • Roofing, gutters, and external fixtures
- • Gardens, driveways, and pathways
- • Building services (plumbing, electrical mains)
- • Common property contents and equipment
- • Public liability for common areas
- • Management liability (committee protection)
What's Usually NOT Covered
- • Individual unit contents and belongings
- • Personal fixtures within units
- • Individual unit improvements/renovations
- • Personal liability for unit owners
- • Individual unit water damage (often)
- • Personal vehicles in car parks
- • Unit-specific electrical/plumbing issues
- • Individual balcony contents
- • Personal loss of use or accommodation
- • Individual legal expenses
Understanding Coverage Divisions
Body Corporate Insurance
Covers:
- ✓ Common property structure
- ✓ Shared building services
- ✓ Common area liability
- ✓ Management committee protection
- ✓ Statutory requirements
- ✓ Common property contents
Paid By:
All unit owners through quarterly strata levies. Cost shared based on unit entitlements.
Unit Owner Insurance
Covers:
- ✓ Contents and personal belongings
- ✓ Unit improvements and renovations
- ✓ Personal liability
- ✓ Alternative accommodation
- ✓ Internal unit fixtures
- ✓ Loss of rent (if investment)
Coverage Types:
- • Contents insurance (essential)
- • Unit/lot owners insurance
- • Landlord insurance (if renting)
Potential Gap Areas
Common Gaps:
- ⚠ Water damage between units
- ⚠ Unit improvements/renovations
- ⚠ Balcony and courtyard contents
- ⚠ Internal unit water pipes
- ⚠ Unit-specific electrical issues
- ⚠ Glass replacement (varies by state)
Important:
Check your strata bylaws and insurance policies for specific coverage boundaries. Gap insurance may be available.
State-by-State Differences
New South Wales
- • Owners Corporation
- • Must insure to full replacement value
- • $20M public liability minimum
- • Office bearer liability included
- • Building defects coverage required
Victoria
- • Owners Corporation
- • Reinstatement value required
- • $10M public liability minimum
- • Committee member protection
- • Common property damage emphasis
Queensland
- • Body Corporate
- • Full replacement cost required
- • $10M public liability minimum
- • Lot owner improvements coverage
- • Caretaking/letting agent liability
Western Australia
- • Strata Company
- • Reinstatement cost basis
- • $5M public liability minimum
- • Council of owners protection
- • Common property focus
South Australia
- • Strata Corporation
- • Current replacement value
- • Adequate public liability
- • Management committee coverage
- • Community property insurance
Tasmania & Territories
- • Body Corporate (TAS/ACT/NT)
- • Full reinstatement value
- • Adequate public liability
- • Executive committee protection
- • Common property emphasis
Types of Strata Insurance Coverage
Basic Strata Insurance
Minimum required coverage for body corporates
Mandatory Inclusions:
- ✓ Common property building structure
- ✓ Public liability (state minimums)
- ✓ Management/committee liability
- ✓ Fire, storm, theft protection
- ✓ Basic common area contents
Limitations:
- ✗ Limited coverage amounts
- ✗ Basic perils only
- ✗ No lot owner improvements
- ✗ Limited business interruption
- ✗ Minimal additional benefits
Comprehensive Strata Insurance
Enhanced protection with broader coverage
Additional Features:
- ✓ Accidental damage coverage
- ✓ Higher public liability limits
- ✓ Lot owner improvements coverage
- ✓ Loss of rent/service charges
- ✓ Alternative accommodation
- ✓ Temporary repairs and protection
- ✓ Professional fees coverage
- ✓ Removal of debris
Premium Options:
- + Glass replacement coverage
- + Motor burnout protection
- + Cyber liability coverage
- + Employment practices liability
- + Legal expenses coverage
- + Building defects coverage
- + Contract works insurance
- + Office bearer indemnity
Common Strata Insurance Claims and Issues
Water Damage Between Units
The most common and complex strata claims. Damage can originate in one unit but affect multiple units and common property. Coverage depends on cause, location, and policy terms.
Usually Covered by Strata:
- • Burst common water pipes
- • Roof leaks into units
- • Common area flooding
- • External water penetration
Usually Unit Owner's Responsibility:
- • Unit-specific plumbing failures
- • Appliance overflows within unit
- • Negligent water damage
- • Unit renovation water damage
Building Defects and Structural Issues
Significant concern for newer strata buildings. Coverage varies widely between policies and may require specific building defect insurance or warranty coverage.
- • Structural movement and cracking
- • Waterproofing failures
- • External cladding issues
- • Fire safety system defects
- • Common area construction defects
Liability Claims in Common Areas
Body corporates face liability for injuries and damage in common areas. Adequate public liability coverage and proper maintenance are essential.
- • Slip and fall accidents
- • Pool and gymnasium injuries
- • Lift malfunctions
- • Balcony and stairwell accidents
- • Car park incidents
Glass and Glazing Claims
Glass replacement can be expensive in modern apartment buildings. Coverage varies between policies and may distinguish between accidental and storm damage.
- • Common area glazing and windows
- • Balcony glass panels and balustrades
- • Entry door glass and shopfronts
- • Internal common area glass features
- • Accidental vs storm damage distinctions
Essential Unit Owner Insurance
Contents Insurance (Essential)
Protects your personal belongings, furniture, electronics, and clothing. Strata insurance does NOT cover your personal property. Choose replacement value coverage and ensure adequate sum insured - most people significantly underestimate contents value.
Personal Liability Insurance
Covers you for liability claims arising from within your unit or caused by your actions. Strata public liability only covers common areas. Consider minimum $20 million coverage for adequate protection against injury or damage claims.
Alternative Accommodation
If your unit becomes uninhabitable, strata insurance typically won't provide alternative accommodation for unit owners. Your contents policy should include temporary accommodation coverage - typically 10-20% of contents sum insured.
Unit Improvements and Renovations
Any improvements or renovations you make to your unit beyond the original specification may not be covered by strata insurance. This includes upgraded kitchens, bathrooms, flooring, lighting, and fixtures. Ensure these are covered by your personal insurance.
Landlord Insurance (If Renting Out)
If you rent your unit, standard contents insurance won't cover landlord risks. You need specific landlord insurance covering rental income loss, tenant damage, and landlord liability. This is in addition to, not instead of, your personal contents coverage.
Expert Tips for Unit Owners
Review Strata Insurance Annually
Attend AGMs and review the body corporate's insurance arrangements. Ensure coverage is adequate and understand what's covered. Ask for insurance certificates and review policy summaries provided.
Understand Your Bylaws
Read your strata bylaws carefully to understand what you're responsible for maintaining and insuring. Bylaws can vary significantly between developments and may override standard state legislation.
Document Unit Improvements
Keep detailed records and receipts for all improvements and renovations. Take photos before and after work. This documentation is crucial for insurance claims and establishing coverage boundaries.
Maintain Communication
Stay engaged with your body corporate and strata manager. Report maintenance issues promptly. Understand the claims process for both strata and personal insurance. Build relationships with neighbours for mutual protection.
Important Disclaimer
This guide provides general information only about strata insurance in Australia. Strata legislation, insurance requirements, and coverage vary significantly between states, territories, and individual developments. Always read your strata bylaws, building insurance policies, and personal insurance policies carefully. Consult with your strata manager, body corporate committee, insurance broker, or legal professional for advice specific to your circumstances and development.
Strata Property Damage?
We specialise in strata and apartment building restoration. Our team understands the complexities of body corporate insurance and can work with your strata manager and insurer.