If you own a unit, townhouse, or apartment in a strata-titled building, or if you sit on an owners corporation committee, understanding strata insurance is not optional — it is a legal requirement. Yet many strata owners and committee members have only a vague idea of what their policy actually covers, who is responsible for what, and what to do when something goes wrong.
What Is Strata Insurance?
Strata insurance is a specialised type of insurance that covers the common property and shared areas of a strata-titled development. This includes the building structure, common areas such as lobbies, lifts, gardens, pools, and car parks, as well as the owners corporation’s legal liability for injuries or damage occurring in those areas.
Is Strata Insurance Compulsory in Australia?
Yes. In every Australian state and territory, owners corporations are legally required to hold strata insurance. The specific requirements vary by state, but the general obligation is to insure the building for its full replacement value and to hold public liability insurance for the common property.
Failure to maintain adequate strata insurance exposes every lot owner in the building to significant financial risk, and the committee members responsible for the oversight to potential personal liability.
What Does Strata Insurance Cover?
A comprehensive strata insurance policy typically includes:
- Building replacement — covers the cost to rebuild or repair the building following damage from fire, storm, water damage, and other insured events.
- Common property contents — covers furniture, equipment, and other contents in common areas.
- Public liability — protects the owners corporation if someone is injured or their property is damaged on common property.
- Office bearers liability — covers committee members against claims arising from decisions made in their capacity as committee members.
- Workers compensation — required if the owners corporation employs staff such as building managers or cleaners.
- Machinery breakdown — covers the cost of repairing or replacing common property equipment such as lifts and pool pumps.
What Is Not Covered by Strata Insurance?
Strata insurance covers the common property — not your individual lot. As a lot owner, you are responsible for insuring your own contents, any improvements you have made to your unit, and your personal liability within your lot. This is why lot owners should hold their own contents insurance and consider landlord insurance if their property is tenanted.
Getting the Right Strata Insurance
Strata insurance is complex, and getting it wrong can be very costly. An underinsured building leaves every lot owner exposed when disaster strikes. At HC Insurance, our brokers specialise in strata insurance and work with leading Australian insurers to ensure your building is properly covered. We also assist with valuations to ensure your sum insured accurately reflects the current cost to rebuild.
Contact HC Insurance today for expert strata insurance advice tailored to your building and your owners corporation’s specific needs.