What Strata Insurance Actually Covers (And What It Doesn't) — A State-by-State Breakdown
Every strata scheme in Australia is required to insure the building. But ask most owners what their strata insurance actually covers, and you'll get a blank stare. The answer matters more than you think — because the gaps between what's covered and what isn't are exactly where owners get caught out when something goes wrong.
What Strata Insurance Typically Covers
Strata insurance (sometimes called building insurance or body corporate insurance) is taken out by the owners corporation and covers the building's common property and, in most states, the individual lots as originally built. The standard policy typically includes:
Building and Common Property
This is the core coverage. It insures the physical structure of the building — walls, roofs, floors, ceilings, windows, balconies, stairwells, lifts, car parks and all common area infrastructure. If a storm damages the roof or a fire destroys a hallway, this is what pays for the repairs.
Original Fixtures and Fittings
In most states, the policy covers fixtures and fittings within individual lots as they were when the strata plan was registered. This typically includes original kitchens, bathrooms, flooring, built-in wardrobes and internal walls. The critical word here is "original" — if you've renovated, your upgrades may not be covered.
Public Liability
Most strata policies include public liability coverage (typically -20 million), which protects the owners corporation against claims from people who are injured on common property. This covers visitors, tradespeople, delivery drivers and anyone else lawfully on the premises.
Voluntary Workers
Coverage for volunteers (such as committee members) who are injured while performing duties on behalf of the owners corporation.
Office Bearers Liability
Protection for committee members against claims arising from decisions made in their capacity as office bearers.
What Strata Insurance Typically Does NOT Cover
Your Renovations and Upgrades
If you've upgraded your kitchen, installed new flooring, or renovated your bathroom, those improvements are almost certainly not covered by the strata policy. They need to be covered by your own contents insurance or a specific lot owner's improvement policy.
Your Personal Contents
Furniture, clothing, electronics, artwork, jewellery — everything you'd take with you if you moved. None of this is covered by strata insurance. You need your own contents insurance policy.
Temporary Accommodation
If your unit is damaged and uninhabitable, the strata policy may not cover your temporary accommodation costs. Some policies include this, but many don't — or include it with strict limits.
Gradual Damage
Most policies exclude damage that occurs gradually over time, such as slow water seepage, mould from poor ventilation, or general wear and tear. This is a significant exclusion, because gradual water damage is one of the most common problems in strata buildings.
Intentional Damage by Owners
If an owner or their tenant damages common property intentionally, the insurer may decline the claim or seek to recover costs from the responsible party.
State-by-State Variations
Strata legislation differs across states, and the boundary between what the strata policy covers and what the individual owner must insure varies significantly.
| State | What Strata Policy Covers | Key Differences |
|---|---|---|
| NSW | Building structure, common property, original fixtures and fittings within lots | Most comprehensive coverage of lot interiors; owners must insure improvements and contents |
| VIC | Common property and shared areas; lot coverage depends on the owners corporation rules | Coverage of lot interiors is less automatic; check your OC rules carefully |
| QLD | Common property, building structure, and fixtures as defined in the building format plan | Body corporate coverage boundary depends on the plan type (standard format, building format, volumetric) |
| WA | Building and common property; lot coverage varies by strata plan type | Undergoing five-year strata law review (completing 2026); coverage boundaries may change |
| SA | Common property and building structure | Strata corporations must insure for replacement value; individual lot coverage varies |
| TAS | Common property and building per the strata plan | Smaller market with fewer insurer options |
| ACT | Common property and units as built | Unit plan boundaries define coverage; owners insure improvements |
| NT | Common property and building structure | Cyclone risk significantly impacts availability and cost |
The Danger Zone: Fixtures and Fittings
The boundary between "original fixtures" (covered by strata insurance) and "owner improvements" (not covered) is the single biggest source of confusion — and financial exposure — for apartment owners.
Consider a typical scenario: your upstairs neighbour's bathroom leaks, damaging your ceiling and kitchen. The strata insurance covers the structural repair (ceiling, common property pipes) and restoring your kitchen to its original specification. But if you renovated your kitchen five years ago and installed ,000 worth of stone benchtops and premium appliances, the strata policy will only pay to restore the original kitchen — not your upgrade.
The gap between the original specification and your current kitchen? That's your problem, unless you have your own lot owner's insurance.
How to Check Your Coverage
Every owner should take these steps:
- Request a copy of the strata insurance policy from your strata manager
- Read the policy schedule — it lists the sum insured, excesses, exclusions and specific conditions
- Check whether your lot's improvements and renovations are listed or excluded
- Compare the strata coverage with your own contents insurance to identify any gaps
- Ask your insurer or broker directly if you're unsure about a specific scenario
How UnitBuddy Helps
UnitBuddy's insurance benchmarking tools let you compare your building's coverage and costs against similar buildings, helping you identify whether your scheme is adequately insured and competitively priced.
Strata insurance protects your building, not necessarily your home. Understanding the boundary between what's covered and what isn't could save you tens of thousands of dollars when something goes wrong.