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What Strata Insurance Covers
Strata insurance covers common property, shared assets and legal liability for strata-titled buildings and their owners corporations. It responds when damage or a liability claim hits the parts of the building nobody owns individually.
Cover extends to the building, common areas and shared facilities, plus liability cover for the owners corporation itself. It keeps the property funded for repair and the committee protected while it runs the scheme.
Whether the building is a residential apartment complex, a mixed-use development or commercial strata, strata insurance is the base cover for Australian strata communities. Each lot owner needs home and contents insurance. It sits within our personal insurance range at Fortis Risk Solutions.
Strata Insurance: Cover Sections and Benefits
What Strata Insurance does not cover
Strata insurance covers the building and the common property. It stops at the boundary of the lot, and it stops at damage that has been building up for years. Typical exclusions are:
- Lot owner contents, carpets, curtains, light fittings and appliances, depending on how the plan defines the lot
- Gradual deterioration, rust, concrete cancer and rot in the common property
- Defective building work and design faults, which usually sit with the builder rather than the policy
- Water entry through failed waterproofing or a balcony that was never maintained
- Damage caused deliberately by an owner or their tenant
- Loss of rent for an individual lot, which belongs on a landlord policy
- Breakdown of lifts, pumps and pool plant unless the machinery extension is taken
FRS reads the plan of subdivision and the owners corporation rules with the committee, so the split between the policy and each lot owner is agreed before a claim tests it.
How Strata Insurance premiums are set
The building valuation drives strata insurance more than any other input. Insurers want a current reinstatement figure prepared by a valuer, then price the rest of the risk around it. What matters:
- The declared reinstatement value, including demolition, professional fees and the cost of meeting current building codes
- Height, construction type and the age of the building
- Cladding, including any combustible material identified in an audit
- The mix of occupants: owner occupied, long term rentals or short stay letting
- Claims history for the plan, particularly repeat water damage
- Fire protection, sprinklers, security access and lift maintenance
- The limits taken for office bearers liability, public liability and loss of common area rent
Committees often carry an old valuation for years and then find the sum insured falls short. FRS asks for a current one and puts the improvements to the market before renewal.
How to claim on Strata Insurance
A strata insurance claim involves more people than a domestic loss, so the record matters. Report early and keep the committee informed at each step. The FRS process:
- Notify FRS or your strata manager as soon as damage is reported, even if the source is still unknown
- Make the common property safe and stop further water entry where that can be done safely
- Photograph the damage and keep any plumber or trade report that identifies the cause
- Report theft, vandalism or malicious damage to police and record the number
- Do not admit responsibility to an affected owner before the cause is established
- FRS lodges the claim, coordinates the assessor with the manager and reports back to the committee
Owners and managers can start the process on our make a claim page.
Strata Insurance compared with lot owner Contents Insurance
| Question | Strata Insurance | Lot Owner Contents |
|---|---|---|
| What it covers | The building, common property and owners corporation liability | Furniture, appliances and personal belongings inside the lot |
| Who buys it | The owners corporation, funded by levies | Each owner or tenant, individually |
| Typical trigger | Fire, storm or a burst pipe in common property | Burglary, or water damage to your own goods |
| Sits with | Office bearers liability and machinery breakdown | Landlord cover where the lot is rented out |
Owners often assume the levy covers everything inside the apartment. It rarely does. A separate contents policy, or home and contents insurance written for a unit, fills the gap between the plan and the front door.
Strata Insurance FAQs
Yes. State and territory strata legislation generally makes it mandatory.
It covers common property and shared structures. Each lot owner insures their own contents and internal improvements, unless the strata plan says otherwise.
No. Lot owners arrange their own contents or landlord cover.
Yes. Regular replacement cost valuations keep the sum insured accurate, which is what avoids underinsurance and legislative non-compliance.
Strata policies vary widely in valuation method, exclusions and claims handling. As your broker, FRS helps you:
- Arrange compliant building replacement valuations
- Structure liability and catastrophe limits that match the building
- Compare strata wordings beyond price
- Manage complex claims and coordinate owners, managers and insurers
Lot owners who rent out their apartment need landlord insurance on top. Buildings with shops or offices at ground level also raise commercial property owner insurance questions.