Insurance

What Is Strata Insurance? A Beginner's Guide for Australian Apartment Owners (2026)

A clear, jargon-free explanation of what strata insurance is, who pays for it, what it does, and what you need to know as an Australian apartment owner: written for first-time buyers and anyone confused by the terminology.

5 May 2026 · 10 min read

On this pageThe simple definition

If you've just bought into a strata building (or you're thinking about it), strata insurance is one of the first technical concepts you'll bump into, and one of the most confusing. The terminology varies by state, the policy is held by an entity that isn't you, and the boundary between what's covered and what isn't sits inside the walls of your own apartment.

This guide answers the foundation question (what is strata insurance, in plain English) without assuming you already know how strata works.

The simple definition

Strata insurance is a building insurance policy held by your owners corporation (the legal entity that runs your strata scheme) to protect the building, common property, and certain shared risks on behalf of every lot owner.

You don't buy strata insurance individually. The owners corporation buys it as a single policy covering the whole building, and your share of the cost is built into the strata levies you pay every quarter.

Think of it like this: if you owned a freestanding house, you'd buy your own building insurance policy. Because you own a slice of a larger building shared with other people, the building insurance is bought collectively, by the entity that represents all of you, and the cost is shared proportionally.

Building and common property insured
Owners corporation holds the policy
Premium shared through quarterly levies
Certificate and schedule show the cover
Renewal reviewed at budget or AGM time
Contents and upgrades need your own cover

Strata insurance is a shared building policy. Your own contents policy fills the personal-property gap.

The terminology you'll see

The same insurance is called different things depending on where you are in Australia and who's writing about it:

Term	What it means
Strata insurance	The most common general term; used in NSW, VIC, WA, SA
Body corporate insurance	The Queensland and NT term for the same thing
Residential strata insurance	The full formal name used by insurers
Owners corporation insurance	Used in some Victorian contexts
Strata building insurance	Marketing term for the building portion of the policy
Strata title insurance	Older term, sometimes still used

They all refer to the same kind of policy: a building-and-common-property cover held by the legal entity that runs the scheme.

Who holds the policy?

Strata insurance is held by your owners corporation (or body corporate in QLD and NT, or strata company in WA, or strata corporation in some SA contexts). This is the legal entity that:

Owns the common property
Runs the scheme
Approves the budget
Holds the insurance
Sues and is sued on behalf of the building

When you buy a lot in a strata scheme, you automatically become a member of the owners corporation. You don't have to opt in or sign up; it's automatic on settlement. The owners corporation, in turn, is required by law in every Australian state to hold strata insurance.

Who pays for it?

You do, indirectly. The cost of the strata insurance premium is included in the budget the owners corporation prepares each year. That budget is split between two funds (an operating fund and a long-term fund), and you pay your share through quarterly strata levies.

A typical residential strata scheme might pay $20,000–$200,000+ in annual insurance premiums depending on building size, age, claims history, and location. Your contribution is in proportion to your unit entitlement (your formal share of the scheme).

For the full picture of how levies work and where insurance fits in:

What does strata insurance actually cover?

A residential strata insurance policy in Australia typically includes:

The building: walls, floors, ceilings, roof, foundations, common areas, original fixtures and fittings as installed
Common property: lobbies, lifts, pools, gardens, car parks, shared infrastructure
Public liability: protects the owners corporation if someone is injured on common property
Workers compensation: required if the owners corporation employs anyone directly
Office bearer's liability: protects committee members from personal liability for decisions made in good faith

The policy does not cover your personal belongings, items you've upgraded inside your lot, or anything that's clearly your personal responsibility.

For the full breakdown of what's covered and what isn't:

Is strata insurance mandatory?

Yes. Every Australian state and territory requires the scheme entity to hold building insurance. The minimum extras vary, but the principle is consistent: the building must be insured for replacement value, plus public liability for incidents on common property.

In NSW that duty is section 160 of the Strata Schemes Management Act 2015. The owners corporation must take out a damage policy for the building for the full replacement cost, including removal of debris and the fees of architects and other professionals. It is not a committee preference. Victoria’s Owners Corporations Act 2006, Queensland’s Body Corporate and Community Management Act 1997, WA’s Strata Titles Act 1985, SA’s Strata Titles Act 1988 (and the Community Titles Act 1996 for community schemes), Tasmania’s Strata Titles Act 1998, the ACT’s Unit Titles (Management) Act 2011 and the NT’s Unit Title Schemes Act 2009 each impose their own version of the same idea.

A scheme without current cover is in breach of its Act and leaves every lot owner exposed to an uninsured rebuild. Certificates of currency must be renewed and made available to lot owners on request. In NSW, insurance particulars also flow into the section 184 certificate a buyer will read.

Why has strata insurance become such a big issue?

If you're new to apartment ownership, you might be surprised at how much airtime strata insurance gets in news coverage and committee discussions. The reason: premiums have risen 40–80% in many buildings since 2022, and the upward pressure isn't slowing.

The drivers:

Reinsurance market hardening. Australian insurers source backing from global reinsurance markets, which have been tightening since 2020.
Climate-related claims. Major flood events (Lismore 2022), bushfire risk premiums, and hail/storm damage claims have repriced the entire residential property market.
Cladding remediation. Buildings with combustible cladding face significantly higher premiums or, in some cases, the inability to obtain cover at all.
Construction cost inflation. Replacement values have risen sharply, driving sum-insured upward.
Water damage claims. The single largest claim category in apartment buildings, growing 45% over five years in NSW alone.

Strata insurance is now one of the largest single line items in most strata budgets, and it has become the focal point for committees looking to control levy increases.

What does strata insurance NOT cover?

The most important thing to understand as a new apartment owner: strata insurance covers the building, not your stuff. Specifically not covered:

Personal belongings: furniture, electronics, clothes, art, jewellery, kitchenware, bikes
Improvements you've made: renovated kitchens, new bathrooms, timber floors, custom built-ins, air conditioning
Wear and tear: gradual damage over time is a maintenance issue, not an insurance event
Personal liability inside your lot: guests injured inside your apartment fall outside the strata policy

For all of this, you need your own contents insurance policy. The two policies are designed to fit together: the strata covers the building, your contents covers what's inside.

How to find out what your scheme has

Three simple steps:

Ask for the certificate of currency. As a lot owner, you have the right to request the current insurance certificate from your strata manager or owners corporation. Most schemes provide it on request without question.
Read the schedule. The certificate lists the insurer, sum insured, public liability limit, premium, excesses, and policy period. None of it is in difficult language once you know what to look for.
Check the renewal date. Premiums and conditions change at renewal. Knowing the renewal date is the first step to influencing it: committees can shop the policy around at renewal, and owners can attend AGMs where insurance is reviewed.

What to ask before you buy a strata apartment

If you're considering buying into a strata building, the insurance situation is one of the most important things to check. Ask:

What is the current strata insurance premium and how has it tracked over the last 5 years?
Are there any claims pending or recent claims history?
Is the building affected by combustible cladding, embedded networks, or other features that affect insurability?
What is the public liability limit?
Are there any specific exclusions for water damage, mould, or other common claim categories?

A good strata report covers all of this. If the strata report is thin on insurance detail, that itself is a warning sign.

Who can see the policy, and who can change it

Lot owners are not strangers to the policy. They pay for it. They can ask for the certificate of currency, the schedule, last year’s premium, the excess table and — where the law now requires it — commission disclosure. They cannot ring the insurer and rewrite the wording. That authority sits with the owners corporation (or body corporate, strata company or corporation), usually exercised by the committee or the managing agent under the agency agreement.

If you want a higher public-liability limit, a flood extension, or a different broker, the path is a motion, not a complaint in the foyer. Put the valuation date, the sum insured and the water-damage excess on the AGM agenda in plain figures. Owners vote more calmly when they can see the number.

Self-managed schemes still hold the same statutory policy. There is no “small building exemption” from the duty to insure the building. There may be lighter extras around office-bearers or workers compensation if you have no workers. Check the Act for your state; do not copy a 200-lot tower’s broker email.

What “the OC is insured” does not mean

It does not mean your sofa is insured. It does not mean last year’s kitchen is insured. It does not mean the insurer will pay a slow leak the scheme ignored for three summers. It does not mean office-bearers’ cover will pay a special levy. And it does not mean commissions have been banned: as at August 2026 the NSW PEC work is a report, not a statute.

If you remember one sentence from this beginner’s guide, remember this: strata insurance is the scheme’s damage policy for the building, required by the strata Act, paid through levies, and always incomplete without your own contents (and landlord) cover.

How UnitBuddy helps

UnitBuddy is built for strata owners and committees, not for the strata managers who run the policies. The platform tracks your building's insurance, including premium history, claim activity, renewal dates, broker commissions, and how your premium compares to similar schemes, so you can see the full picture rather than relying on what's in front of you at the AGM.

See how the platform handles insurance and financials · Get started

Frequently asked questions

Do I need to organise strata insurance when I buy an apartment?

No. The owners corporation already holds the strata policy on behalf of the whole building. You don't need to organise it separately. You do need to organise your own contents insurance.

How is strata insurance different from contents insurance?

Strata insurance covers the building and common property; contents insurance covers your personal belongings and improvements. They're designed to work together: the strata policy stops at the boundary of "building", and contents takes over from there.

Who decides what strata insurance the building has?

The owners corporation, advised by a broker and the strata manager. Decisions are made at the AGM each year, where owners vote on whether to renew, switch insurers, or change cover levels.

Can I see what the strata insurance covers before I buy an apartment?

Yes. Strata reports include insurance details, and you can request the certificate of currency from the seller's solicitor or strata manager. Reading it before settlement is strongly recommended.

What happens if the strata insurance lapses?

A scheme without current strata insurance is in breach of state legislation. The committee and owners corporation are responsible for ensuring continuous cover. If a claim arises during a lapse, owners are exposed to the full uninsured loss.

Is body corporate insurance the same as strata insurance?

Yes. "Body corporate insurance" is the term used in Queensland and the Northern Territory; "strata insurance" is the term used in most other states. They refer to the same kind of policy.