What Does Strata Insurance Cover? A Plain-English Guide for Australian Apartment Owners (2026)

What does strata insurance cover? It is one of the most common questions Australian apartment owners ask, and one that most struggle to answer. Strata insurance is the policy your owners corporation holds on behalf of every lot owner in the building. It is the largest single line item on most strata budgets, and it has become one of the biggest drivers of levy increases over the past few years. Despite that, most apartment and unit owners have only a vague idea of what it covers and even less clarity on where it ends.

This guide answers the question directly: what does strata insurance cover, what doesn't it cover, and where is the gap that catches owners by surprise.

The short answer

Strata insurance covers the building, the common property, and the original fixtures and fittings as installed at registration. It also covers public liability for incidents on common property and certain other risks the owners corporation is exposed to.

Strata insurance does not cover personal belongings, items you've upgraded or replaced inside your lot, or improvements made by individual owners. Those sit on your side of the line and need to be covered by your own contents insurance.

That two-sentence summary captures the principle. The detail, and the disputes, live in the gap between them.

What strata insurance covers

A standard residential strata insurance policy in Australia includes:

Building cover for the physical structure and common property. The walls, floors, ceilings, roof, foundations, lobbies, lifts, stairwells, car parks, gardens, fences, pools, and shared utility infrastructure. Insured for full replacement value, including demolition, professional fees, and code-upgrade costs if rebuilding requires them.

Original fixtures and fittings as installed at registration. This is the term that causes the most confusion. It means the kitchen, bathroom, light fittings, doors, windows, and built-in items as they existed when the building was first registered as a strata scheme. Your apartment's original 1995 kitchen is covered; the 2024 renovation that replaced it is not, unless you have specific extension cover.

Public liability. Protects the owners corporation if someone is injured on common property: a slip on wet lobby tiles, a child falling at the pool, a contractor injured during routine maintenance. Standard cover is usually $20–30 million.

Workers compensation where the owners corporation employs anyone directly. Most schemes use contractors rather than employees, but if a building manager, cleaner, or concierge is employed by the owners corporation, this cover is mandatory.

Office bearer's liability in most states. Protects committee members from personal liability for decisions made in good faith on behalf of the owners corporation.

Loss of rent or temporary accommodation in some policies. If common property damage makes lots uninhabitable, this section covers temporary housing or lost rental income for a defined period.

Catastrophic damage including fire, storm, flood (with significant exclusions in flood-prone areas), earthquake, malicious damage, and impact (vehicle, fallen tree, debris).

What strata insurance does not cover

The exclusions are where most owners get caught out:

Your personal belongings. Furniture, electronics, clothing, kitchenware, art, jewellery, bikes: anything that would be in a removal truck if you moved out. None of it is covered by strata insurance, even if it's destroyed by an event the strata policy responds to.

Items you've upgraded or replaced inside your lot. Renovated kitchens, new bathrooms, timber floors installed over original carpet, custom built-ins, additional walls, air conditioning installed by you, smart home wiring, and so on. The original-as-installed condition is the line.

Damage to your lot caused by you or your guests. A flooded bathroom because you left the bath running, fire damage because you fell asleep with a candle burning, water damage from your overflowing dishwasher: these are usually your liability, not the building's.

Wear and tear, gradual deterioration, and lack of maintenance. Insurance is for sudden events, not slow ones. If a roof slowly degrades over twenty years and starts leaking, that's a maintenance issue (covered by levies and the capital works fund), not an insurance event.

Pre-existing damage. Anything that was already broken or damaged when the policy was taken out, unless specifically agreed.

Specific high-exclusion items. Most policies have specific limits or exclusions for jewellery, cash, art above a threshold, business equipment, and items not properly secured.

Excluded perils. The big ones to check: actions of the sea (some states), war and terrorism, nuclear events, intentional damage by an insured party. Flood cover is also commonly excluded or sub-limited in coastal and flood-zone buildings.

The grey areas: where most disputes happen

Three areas cause more strata insurance disputes than anywhere else.

Water damage between lots

If a leak from one apartment damages the apartment below, who pays? It depends on:

• Where the leak originated (common property pipe vs. private appliance)
• Whether the upstairs owner was negligent
• The specific wording of the strata policy
• Strict liability obligations under the relevant state Act
• Whether the upstairs owner has contents/liability cover

NSW, Victoria, and several other states impose strict liability on the owners corporation for damage caused by failure to maintain common property. If the leak originates from a wall cavity pipe, the owners corporation is responsible for repairing both lots. But if it's from a leaking dishwasher inside the upstairs lot, the upstairs owner is responsible.

Fixtures and fittings: original vs. replaced

The strata policy covers original fixtures, but how does the insurer know what was original? In practice, claims assessors look at the building's age, photographs, building plans, and the type of fixture. A kitchen that's clearly from a different era to the building is treated as a replacement (yours to cover). A kitchen that matches the building's original fitout is treated as original (covered).

For owners who've renovated, the practical answer is: extend your own contents policy to cover fixtures and improvements, and don't rely on the strata policy to respond.

Mould and moisture damage

Mould is one of the most common, and most legally complex, strata damage categories. Most strata policies exclude mould unless it results directly from a covered insured event. Recent NCAT and VCAT decisions have ordered owners corporations to pay for mould rectification when the underlying cause was a maintenance failure on common property.

How coverage differs across Australian states

The legal frameworks are similar but not identical. The detail you need to know:

NSW (Strata Schemes Management Act 2015). Section 160 requires the owners corporation to insure the building under a damage policy for full replacement cost, including removal of debris and professional fees. Public liability, workers compensation, voluntary workers and office-bearers’ cover sit around that duty. The 2025 reforms tightened disclosure of premiums, commissions and renewals. They did not make the damage policy optional.

Victoria (Owners Corporations Act 2006). Tier 1 and 2 schemes must hold building insurance with public liability of at least $10 million. Lower-tier schemes have lighter prescribed cover but not a lighter duty to keep the building insurable. The June 2026 Engage response and the Consumer Legislation Amendment Bill 2026 are not a new insurance code.

Queensland (Body Corporate and Community Management Act 1997). The body corporate must hold full replacement insurance for the building, public liability of at least $20 million, voluntary workers, and office-bearers’ liability where applicable.

WA (Strata Titles Act 1985, as amended 2018). Strata company must hold building insurance for replacement value, public liability of at least $10 million, and workers compensation where applicable.

SA (Strata Titles Act 1988 / Community Titles Act 1996). Mandatory building insurance for replacement value, public liability, and certain other risks. Smaller schemes have lighter prescribed extras.

TAS (Strata Titles Act 1998). Mandatory building insurance for replacement value, plus public liability.

ACT (Unit Titles (Management) Act 2011). Building insurance for replacement value, public liability of at least $10 million, and additional cover requirements for executive committee members.

NT (Unit Title Schemes Act 2009). Mandatory building insurance for replacement value, public liability, and related scheme obligations. Older plans may still sit under the Unit Titles Act 1975.

For full state-by-state policy detail:

How to read your strata insurance certificate of currency

Every owners corporation must make the certificate of currency available to lot owners on request. Reading it carefully is one of the most useful things an owner can do once a year.

1. 01
   Sum insured covers full rebuild
2. 02
   Public liability limit set
3. 03
   Excess amounts per peril
4. 04
   Specific exclusions listed
5. 05
   Premium vs prior year
6. 06
   Commissions and disbursements

What to look for:

1. Sum insured. Is the building covered for full replacement value, including demolition and professional fees? Underinsurance is one of the biggest hidden risks in older policies: premiums rise but sum insured doesn't, and a major loss may exceed cover.

2. Public liability limit. $10 million is a minimum baseline. $20 million is more typical for medium and large schemes. Anything less in a multi-storey building is a flag.

3. Excess amounts. Different excesses for different perils. Water damage excesses can be $2,000–$10,000+ in many policies, which affects how small leaks are handled.

4. Specific exclusions. Flood, mould, gradual deterioration, defective design or construction, asbestos, contamination: read the exclusions list carefully.

5. Renewal premium and prior year comparison. Premiums have risen sharply since 2022. If your premium has risen significantly without a clear reason (claims history, valuation update, market shift), it's worth asking why.

6. Broker commissions and disbursements. These should be disclosed; if they're not, that's a separate problem worth pursuing.

What to hold on top of strata cover as an owner

The strata policy covers the building. You need to cover what's inside your lot:

• Personal belongings: standard contents insurance
• Personal liability: included in most contents policies
• Fixtures and improvements you've made: explicit extension on your contents policy (you have to ask for it)
• Loss of rent (if you're an investor): landlord insurance
• Tenancy-related risks (if you're an investor): landlord insurance

How a claim travels (and where cover arguments start)

A policy wording is not a repair program. The typical path looks like this.

1. Make the building safe. Water off, power isolated, residents moved if needed. Emergency make-safe is usually accepted even while the insurer decides the rest. Photograph before demolition.

2. Tell the owners corporation and the broker the same day. Lot owners who only tell the neighbour create a late-notification fight. The insured is the owners corporation, not the occupant who found the stain.

3. Decide whose policy is on first. Building and common-property damage goes to the strata damage policy. Contents, owner upgrades and tenant belongings stay on lot-level policies. Grey rooms — a renovated kitchen, a membrane that failed slowly, a dishwasher hose — are where most letters of demand start. The certificate of currency will not resolve those. The cause will.

4. Read the excess before you assume a claim is worth making. A $7,500 water excess on a $4,000 ceiling repair is not cover. It is a maintenance invoice with extra forms. Record that decision in the minutes so the next owner does not call it a refused claim.

5. Do not let “wear and tear” and “maintenance” be used as synonyms for section 106. In NSW the owners corporation must still keep common property in good and serviceable repair even when the insurer declines. An exclusion is an insurance outcome. It is not a finding that the scheme has no repair duty. Victoria’s section 46 is the same idea in different clothes.

6. Valuation and sum insured are part of cover. Underinsurance is a coverage failure. If the declared replacement cost is 2019 money, a major loss will not rebuild the building the Act required you to insure. Ask for the last valuation date on the same agenda as the premium.

7. Commissions are not cover. A disclosed commission does not increase the sum insured. As at August 2026, NSW has not banned insurance commissions. The PEC report recommended change; it is not an Act. Owners can still instruct how the policy is placed.

What “full replacement” has to include

A damage policy that only quotes a round building figure is incomplete. Debris removal, professional fees, temporary shoring, compliance upgrades that a rebuild will trigger, and common-property fixtures that sit outside the original specification (later-installed intercoms, solar, EV boards) need a home in the schedule or they become a surprise at claim time. Put new sustainability kit on the asset register and tell the broker.

Office-bearers’ cover is not a shield for every committee email

Office-bearers’ liability responds to certain claims against people acting as committee members. It does not convert an uninsured maintenance defect into an insured event, and it does not fund a special levy the scheme voted not to raise. Read the wording before anyone says “we’re covered” in a WhatsApp group.

How UnitBuddy helps

UnitBuddy tracks your building's insurance policy alongside the rest of its financial life: premium history, claims activity, broker commissions, renewal timing and how your building's premiums compare to similar schemes over time. It helps committees challenge unjustified increases and owners understand what their levies are buying.

See the financials view · Get started

Further reading

• What does Strata Insurance cover? What do we need to disclose?, via LookUpStrata
• NSW: Laundry flooded by strata blockage: what does strata vs contents insurance cover?, via LookUpStrata

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Frequently asked questions

Does strata insurance cover my apartment if it's broken into?

The strata policy covers damage to common property and the building structure caused by a break-in. Damage to your personal belongings or items inside your lot is your contents policy's responsibility.

Does strata insurance cover damage from my own washing machine flooding?

Generally, no. Damage caused by your own appliance is your responsibility. Your contents policy may respond to your own damage, and your liability cover may respond to damage caused to other lots. The strata policy is unlikely to cover it unless the flooding was caused by a common property failure.

What if the strata policy is underinsured?

If a major loss exceeds the sum insured, owners may be liable for a special levy to make up the shortfall. This is one reason why valuations and sum insured figures should be reviewed annually.

How much should strata insurance cost?

Premiums vary enormously based on building age, location, materials (e.g., cladding), claims history, and risk pool. There's no single benchmark. The trend across Australia has been sharp upward pressure since 2022.

Can the owners corporation charge me extra if there's an insurance claim from inside my lot?

Generally, no. Claims are paid by the policy, not by individual owners directly. However, if the owners corporation is liable to pay an excess and the claim arose from negligence in your lot, it may seek to recover the excess from you. The detail varies by state and policy wording.

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Last updated: 5 May 2026. UnitBuddy publishes general information for Australian strata owners and committees. It is not insurance, financial, or legal advice. For advice specific to your situation, consult a licensed insurance broker or your owners corporation's professional advisers.

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