Strata insurance: what the building policy covers and what you need
Strata insurance is the building and common-property policy your owners corporation must hold, so in most schemes you don't insure the building yourself: you need contents cover, and landlord cover if you rent your unit out. The owners corporation is also called a body corporate or strata company, state laws require most schemes to hold the policy, and your share of the premium is paid through your strata levies.
As a unit owner, the strata policy does not cover your belongings, and depending on the scheme and state it may not cover everything inside your lot either. What you need on top depends on whether you live in the unit or rent it out. Our guide to home and contents insurance covers the contents side.
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General advice only. It doesn't consider your circumstances. Read the PDS and TMD before you decide.
The owners corporation's duty to insure
Every state and territory has strata legislation that makes the owners corporation responsible for insuring the building. The details differ: what counts as the building, the minimum public liability cover, and whether the building must be insured for its full replacement value. These requirements are why unit owners do not buy separate building cover.
The strata manager or secretary should be able to give you a copy of the current certificate of currency and the policy wording. Ask for them when you buy, because they tell you exactly where the strata policy stops and your own insurance has to start.
What the law requires in each state
NSW Fair Trading states plainly that strata insurance is mandatory in NSW. Under the Strata Schemes Management Act 2015, the owners corporation must insure the building for rebuilding or replacement to as-new condition, including professional fees and debris removal, and the regulations set the amount as the estimated cost plus 24 months of cost escalation. Public liability cover must be at least $20 million, and workers insurance is required unless an exemption applies. Some two-lot schemes can be exempt from the building insurance requirement.
Every other state and territory sets a similar duty in its own legislation, with different definitions of what must be insured and different liability minimums, as the table shows. Western Australia's minimum cover leaves out damage by sea, flood or erosion. South Australia also makes fidelity guarantee insurance compulsory for strata corporations that hold funds, and in Tasmania an excess from an event affecting only one lot is payable by that lot's owner unless the owners resolve otherwise.
NSW Fair Trading also recommends a new building valuation by a qualified valuer every 2 to 5 years so the sum insured keeps pace with rebuild costs, and requires a strata manager arranging insurance to provide at least three quotes, or explain in writing why that is not possible. It warns that personal items such as furniture, electrical appliances, curtains and carpets may not be covered by the owners corporation, even when damage comes from common property.
| State | Law | Building cover required | Minimum public liability |
|---|---|---|---|
| NSW | Strata Schemes Management Act 2015 (ss 160-164) and Strata Schemes Management Regulation 2016 | Rebuild or replace to as-new condition, with professional fees and debris removal; amount includes 24 months of cost escalation | $20 million (Regulation cl 40) |
| Victoria | Owners Corporations Act 2006 (ss 59-61) | Reinstatement and replacement insurance for the buildings, including lots in multi-level developments | $20 million (s 60) |
| Queensland | Body Corporate and Community Management Act 1997 and Standard Module Regulation 2020 (ss 198, 206) | Full replacement value, reinstated to as-new condition | $10 million per event (public risk) |
| Western Australia | Strata Titles Act 1985 (ss 97-99) | Insurable assets to replacement value against fire, storm and tempest (not sea, flood or erosion), lightning, explosion and earthquake; single tier and survey-strata schemes have their own rules | $10 million |
| ACT | Unit Titles (Management) Act 2011 (ss 100-102) and Unit Titles (Management) Regulation 2011 (s 7) | All buildings to replacement value against listed risks, plus debris removal and professional fees | $10 million |
| Northern Territory | Unit Title Schemes Act 2009 (ss 52-54) | All reasonable costs of reinstating damaged common property, including scheme buildings that are common property | $10 million |
| South Australia (strata titles) | Strata Titles Act 1988 (ss 30-31) and Strata Titles Regulations 2018 (reg 14) | All buildings and building improvements to replacement value, including demolition and professional fees; fidelity guarantee cover is also compulsory where the corporation holds funds | $10 million (reg 14) |
| South Australia (community titles) | Community Titles Act 1996 (ss 103-104) | Buildings and improvements on common property, and in a community strata scheme the buildings divided by the plan, for full replacement cost with new materials | $10 million for bodily injury (s 104) |
| Tasmania | Strata Titles Act 1998 (ss 99-101) and Strata Titles (Insurance) Regulations 2019 (reg 3) | All buildings and improvements on the site, reinstated to their condition when new, with debris removal and professional fees | $10 million (public risk) |
What a strata policy typically covers
Strata policies are commercial products and vary more than home policies. The mandatory parts are set by state law; the rest depends on what the scheme buys. The extras below are as CHU's Residential Strata Insurance Plan PDS (effective 1 May 2026) describes them; other insurers' terms differ.
- The building structure, including walls, roof, floors and, in many schemes, fixtures such as kitchens and bathrooms inside each lot.
- Common property: lobbies, lifts, stairwells, car parks, pools, gardens, fences.
- Public liability for injury or damage on common property.
- Work health and safety insurance for workers on site, where the state requires it (NSW does, subject to exemptions).
- Depending on the scheme and state: fixtures and improvements inside each lot, plus optional extras the scheme chooses to buy.
- Voluntary workers: set benefits for unpaid volunteers injured while working for the owners corporation. Optional in CHU's residential strata PDS.
- Fidelity guarantee: the owners corporation's funds if they are fraudulently misappropriated. Optional in CHU's PDS, and compulsory in South Australia for strata corporations that hold funds.
- Office bearers' liability: claims against committee members and office bearers for their decisions. Optional in CHU's PDS.
- Machinery breakdown: breakdown of lifts and other plant that the main building cover doesn't pick up. An optional extension, for extra premium, in CHU's PDS.
- Catastrophe cover: extra rebuilding costs, and extra temporary accommodation and rent, when the building is destroyed after an event the Insurance Council of Australia declares a catastrophe. An optional extension in CHU's PDS.
How strata committees compare strata insurance quotes
The owners corporation, not each owner, buys the policy, so the committee's comparison sets what every owner pays through levies. Start with an up-to-date building valuation, because the sum insured drives the premium and an old valuation risks underinsurance; NSW Fair Trading recommends a new one every 2 to 5 years. Then compare quotes on the same sum insured, the same optional covers and the same excess, and check the scheme's claims history, which insurers price.
Commissions have to be disclosed. In NSW, a strata managing agent arranging insurance must give at least three quotes from different providers, or written reasons if it can't, and each quote must break out the base premium, any commission and broker fee in dollars and as a percentage, and the taxes and charges. The agent must also report commissions at each annual general meeting. In Victoria, an owners corporation manager must tell the chairperson in writing about a commission before entering the contract, as a percentage of the premium for insurance, and report commissions received in the annual report.
A higher excess lowers the premium but shifts more of each claim onto the scheme, or onto the owner whose lot the damage came from where the by-laws or state law pass it on, so weigh the excess against the scheme's funds.
Where your lot ends: walls, ceilings and floors
Who maintains and insures a wall, ceiling or floor depends on where your lot boundary sits, and each state draws it differently. Start with your strata plan and by-laws; these are the defaults the state guides describe.
In NSW, the NSW Government's guide says that in most cases the owners corporation repairs the roof, the ceiling (except painting, unless the problem comes from changes the owner made), boundary walls, the concrete floor slab, balconies, windows and plumbing in boundary walls and under the floor. The owner repairs internal walls, carpet, internal painting, plumbing in internal walls and fixtures such as showers and baths, and water damage coming from inside the lot.
In Queensland, for schemes on a building format plan, the lot boundary is the centre of the floor, wall or ceiling that separates it from another lot or common property. The Queensland Government's guide says the owner maintains plasterboard, skirting and painting, waterproof membranes in wet areas and shower trays, and floor coverings such as tiles, carpet and floating floors, while the body corporate maintains essential structural elements and shared utility infrastructure.
In Western Australia, lot boundaries are shown on the strata plan's floor plan, and Landgate's guide says the strata company's insurance covers the parts of buildings that make up lots, including paint and wallpaper, but not carpet or temporary floor, wall and ceiling coverings. In Victoria, Consumer Affairs Victoria says lot owners must keep the exterior of their lot in good and serviceable repair; check your plan of subdivision for where the lot ends.
Do I need building insurance for a strata unit?
Usually not. In most strata schemes the owners corporation's policy insures the building, so buying building cover yourself would insure the same structure twice. What you need depends on what the strata policy leaves to you, and that changes with the state, the scheme's plan and its by-laws.
The table shows where each risk usually sits. Read it with your scheme's certificate of currency and policy wording, which the strata manager or secretary can give you.
| Item or risk | Strata policy | Your policy |
|---|---|---|
| Building structure: roof, external walls, floor slab | Yes, under state law | No |
| Common property: lobbies, lifts, car parks, pools, gardens | Yes | No |
| Fixtures inside your lot, such as kitchens and bathrooms | Often, depending on the state and scheme | Check what the strata policy leaves out |
| Carpet, floating floors and internal paint | Depends on the state: in WA, Landgate says the strata policy covers paint and wallpaper but not carpet; in NSW and Queensland the owner maintains many internal finishes | Contents or a policy that covers lot fixtures, for what the strata policy excludes |
| Renovations and improvements you've made | May not be covered at current value | Tell the strata manager, and check whether your policy can cover the gap |
| Your furniture and belongings | No | Contents insurance |
| Liability inside your lot | No: public liability covers common property | The legal liability cover in a contents policy |
| Loss of rent and tenant damage | No | Landlord insurance, if you rent the unit out |
| The strata excess, if by-laws pass it to you | No | Some contents and landlord policies contribute to it |
The gaps inside your lot
Your furniture, clothes and other belongings are never covered by the strata policy. You need contents insurance for them, and if you live in the unit that policy should include legal liability for your lot.
The grey zone is fixtures and improvements inside your lot, such as carpets, floating floors, blinds, light fittings and renovated kitchens. Some schemes insure them, some leave them to owners, and state law sets different defaults. If you have renovated, check whether the upgrade is covered by the strata policy at its current value.
If you rent the unit out, the owner-occupier contents policy is replaced by landlord cover for your lot: landlord contents, loss of rent and tenant damage.
Who pays the strata excess
A strata policy has an excess like any other. Whether the owners corporation pays it from its funds or passes it on to the owner whose lot the damage came from depends on the scheme's by-laws and the rules in your state, so ask the strata manager how your scheme handles it. In the ACT, the Unit Titles (Management) Act requires the owners corporation to lodge building insurance claims and pay the excess, although costs caused by an owner's wilful or negligent act may be recovered from that owner. Some contents and landlord policies include a benefit towards a strata excess charged to you. It is worth knowing which applies before a burst pipe floods two floors.
Why strata premiums rise
Strata premiums reflect the building's size, age, construction, location and claims history, and they are affected by the same catastrophe costs that drive home premiums. A building with a history of water leaks or unresolved defects is a higher risk to insure. Because the premium is paid from levies, the scheme's insurance history and valuation dates in the strata records are worth reading before you buy.
General advice only. This information doesn't take into account your objectives, financial situation or needs. Consider whether the product is right for you and read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you decide. We don't compare every product in the market, and we may earn a commission if you take up a product through our links.
What to watch for
- Ask for the strata certificate of currency and policy wording when buying a unit.
- Renovations inside your lot may not be covered at their current value by the strata policy.
- Contents cover is always your responsibility.
- Landlords of units need landlord contents and rent cover, not building cover.
- Check the scheme's excess and whether by-laws pass it to lot owners.
Common questions
Do I need building insurance for a strata unit?
Generally not, because the owners corporation must insure the building and common property. You still need contents insurance for your belongings and liability, cover for any fixtures or improvements the strata policy leaves to you, and landlord insurance if you rent the unit out. Check your scheme's policy wording, because the boundary differs by state and scheme.
What is not covered by strata insurance?
Your belongings, always. Depending on the state and scheme, it may also leave out fixtures and improvements inside your lot, such as carpets, floating floors and renovated kitchens, your liability inside your lot, and loss of rent or tenant damage if you rent the unit out. NSW Fair Trading warns that furniture, appliances, curtains and carpets may not be covered even when damage comes from common property.
Does strata include house insurance?
It includes the building part: strata insurance covers the structure and common property that building insurance would cover for a house, plus public liability for common property. It doesn't include contents insurance, so you need your own policy for your belongings and liability inside your lot, or landlord cover if you rent the unit out.
Can I claim strata fees on tax?
Only for a unit you rent out or hold to earn rent. The ATO treats regular strata payments into the administrative fund or a general purpose sinking fund as deductible rental expenses, but not special levies for major capital works, which may instead qualify as capital works deductions. On a home you live in, the ATO's rule against deducting expenses of a private nature applies.
What are the insurance downsides of owning in strata?
You don't choose the policy, the insurer or the excess; the owners corporation does. Premiums flow through your levies, so the building's claims history and any defects raise your costs. You may be charged the excess if the by-laws pass it to the lot where damage started, and there can be gaps inside your lot that neither policy covers unless you check.
Does strata insurance cover my kitchen and bathroom?
Often, because fixtures inside a lot are commonly treated as part of the building. But the rules differ by state and by scheme, particularly for renovations and improvements, so check the strata policy wording.
Who pays the excess on a strata insurance claim?
It depends on the scheme's by-laws and state rules. Some schemes pay the excess from the owners corporation's funds, others pass it to the owner of the lot where the damage started. Some contents and landlord policies help cover a strata excess charged to you.
Is strata insurance included in my strata levies?
Yes. The owners corporation pays the premium and recovers it from owners through levies, usually in proportion to unit entitlement.
Are bathroom leaks covered by strata?
It depends where the leak comes from and your state's rules. The NSW Government's guide puts plumbing in internal walls and fixtures, such as showers and baths, and water damage coming from inside your lot on the owner, and plumbing in boundary walls and under the floor on the owners corporation. In Queensland building format plans, waterproof membranes in wet areas and shower trays are usually the owner's to maintain. Tell the strata manager straight away, and check the escape of liquid cover in both the strata policy and your own.
Who owns the ceiling in strata?
In NSW, the NSW Government's guide treats the ceiling as the owners corporation's to repair, except painting, unless the problem comes from changes the owner made. In Queensland building format plans, the lot boundary runs through the centre of the ceiling and the owner maintains the plasterboard and painting. Check your strata plan and by-laws.