If you own an apartment, townhouse, unit or commercial premises under a strata title system, knowing about strata insurance is important. Many people think that their own personal insurance policy will cover everything but then find that some areas of the building fall under the jurisdiction of the owner’s corporation.
With continued growth in construction prices, weather concerns, and new compliance needs, checking your strata insurance has never been more imperative.
In this guide, we explore what strata insurance is all about in 2026 and what you need to know.
What Is Strata Insurance?
A strata insurance policy can be defined as an insurance policy that is taken out by the owner’s corporation to secure the strata titled property and the common property in the complex.
Legally, owner’s corporations in Australia are obliged to cover the insurances needs of their buildings. Although the specifics may differ, the objective remains to make sure that there is proper coverage in case something unforeseen happens.
In essence, strata insurance is just a means of providing insurance coverage for all those things that the owner’s corporation shares.
What Does Strata Insurance Cover?
Coverage can vary significantly between insurers and policies, so it’s important to review policy documentation carefully. However, most strata insurance policies commonly provide cover for the following areas.
Building and Common Property
One of the main purposes of strata insurance is to protect the physical structure of the building and shared facilities.
This may include:
● Building Structure – Roofs, walls, foundations, and other structural components of the building.
● Shared Areas – Hallways, stairwells, foyers, and other common access areas used by all occupants.
● Facilities – Lifts, elevators, gym areas, and shared amenities within the property.
- ● Outdoor Areas – Gardens, pathways, landscaping, and communal outdoor spaces.
● Security Features – Gates, fences, intercoms, CCTV systems, and controlled access points.
● Parking Areas – Shared garages, car parks, visitor parking spaces, and driveways.
Cover is subject to policy terms, conditions, limits, and exclusions.
Public Liability Protection
Public liability insurance is often included within a strata policy. This can help protect the owner’s corporation if it becomes legally liable for injury to another person or damage to someone else’s property occurring within common areas.
For example, if a visitor slips on a wet common pathway and suffers an injury, public liability cover may assist with associated legal costs or compensation of claims, depending on the circumstances and policy conditions.
Protection Against Insured Events
Many strata policies provide cover for insured events such as:
● Fire and smoke damage
● Storm and wind damage
● Lightning strikes
● Impact damage
● Vandalism and malicious acts
● Escape of liquid from burst pipes or plumbing systems
Coverage for floods, bushfires, cyclones, and other natural disasters can vary significantly between insurers, making it important to review the Product Disclosure Statement (PDS) carefully.
Additional Benefits
Depending on the insurer and policy selected, additional benefits may also be available, including:
● Temporary accommodation assistance
● Office bearer liability cover
● Fidelity guarantee protection
● Machinery breakdown cover
● Legal expenses cover
Some benefits may be automatically included, while others may be optional extras.
What Isn’t Usually Covered?
While strata insurance provides broad protection, it doesn’t cover every situation.
Common exclusions often include:
● General wear and tear
● Gradual deterioration
● Poor maintenance
● Intentional damage
● Unauthorised building alterations
● Personal belongings belonging to individual owners or tenants
This is why many lot owners choose to arrange separate contents insurance to protect their furniture, electronics, personal possessions, and other items not covered under the strata policy.
Always refer to the policy wording and PDS for a complete list of exclusions and limitations.
Who Arranges Strata Insurance?
In most strata schemes, the responsibility for arranging insurance rests with the owner’s corporation or body corporate.
The insurance premium is generally paid through strata levies collected from lot owners. Depending on the scheme and applicable legislation, the cost is typically shared among owners based on unit entitlements or another prescribed allocation method.
Professional strata managers and insurance brokers often assist owners corporations in managing insurance requirements and policy renewals.
Why Strata Insurance Reviews Matter More Than Ever in 2026
Rising Building Costs
Construction and rebuilding costs across Australia have increased considerably over recent years.
As a result, many strata properties may now be insured for less than their actual replacement value. If a building’s insured value hasn’t been reviewed recently, the owners corporation could face a serious underinsurance problem following a major claim.
Regular valuations can help ensure the building remains adequately insured.
Increasing Weather-Related Risks
Australia continues to experience severe weather events, including:
● Major storms
● Flooding
● Bushfires
● Cyclones in northern regions
These events can result in significant property damage, making it important for owners corporations to regularly review their coverage and ensure it remains suitable for their property’s risk profile.
Compliance and Legislative Requirements
Insurance obligations for strata schemes differ between Australian states and territories.
Owners corporations are responsible for understanding and complying with relevant legislation. Seeking professional advice can help ensure the scheme remains compliant and adequately protected.
Understanding Underinsurance
Underinsurance occurs when the insured amount is lower than the actual cost required to rebuild or repair the property after a significant insured event.
This can create major financial challenges for owners corporations and lot owners.
Potential Consequences of Underinsurance
● Rebuilding Shortfall – Insurance payouts may not be enough to cover the full cost of rebuilding the property.
● Special Levies – Lot owners may be required to contribute additional funds to cover uninsured costs.
● Delayed Repairs – Reconstruction and repair works can take longer due to funding gaps.
● Financial Stress – Unexpected out-of-pocket expenses can place significant financial pressure on owners.
How to Choose the Right Strata Insurance Policy
Not all strata insurance policies are the same. When comparing options, consider the following factors:
Coverage Features
Review exactly what is covered and identify any exclusions that could affect your property.
Excess Amounts
Different claim types may attract different excesses. Understanding these costs can help avoid surprises when a claim occurs.
Claims Service
A strong claims process can make a significant difference during stressful situations. Consider the insurer’s reputation for handling claims efficiently and fairly.
Policy Documentation
Before making a decision, carefully review:
● Product Disclosure Statement (PDS)
● Target Market Determination (TMD)
● Policy Schedule
● Any endorsements or special conditions
Professional Advice
An experienced insurance broker can help owners corporations understand policy differences, identify potential coverage gaps, and compare available options.
Conclusion
Strata insurance plays a vital role in protecting strata-titled properties across Australia. With rising rebuilding costs, increasing weather-related risks, and evolving regulatory requirements, it is more important than ever for owners corporations to regularly review their insurance arrangements.
Each scheme has its own peculiarities, and therefore, a single solution doesn’t exist. Spending time understanding your cover and reviewing the policy documents will go a long way towards ensuring that your property remains properly insured in 2026.
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