If you own an apartment, townhouse, or unit in a strata scheme, the owners corporation (called a body corporate in Queensland and some other states) is legally required to hold strata insurance on the building. You contribute to the premium through your strata levies. What most apartment owners do not realise is how narrow that coverage actually is — and what remains completely uninsured unless they take out their own policy.
Strata insurance is a building insurance policy that covers the common property and the structure of the building itself. This includes the external walls, roof, foundations, lifts, car park, lobby, swimming pool, common hallways, and any common-area fixtures. In the event of fire, storm, flood, or other insured event, strata insurance pays to repair or rebuild the structure of the building.
Strata policies also typically include public liability insurance for the owners corporation — this covers the body corporate's liability if someone is injured in a common area (such as a slip on a wet lobby floor). This is liability of the owners corporation as a legal entity, not the personal liability of individual lot owners.
| Item | Covered by strata insurance? | What you need |
|---|---|---|
| Your furniture, appliances, electronics, clothing | No | Contents insurance |
| Renovations and improvements you made to the unit | Partially or not at all (depends on state legislation and policy) | Lot owners improvements clause or separate cover |
| Your personal liability (e.g., if a guest is injured in your unit) | No | Contents insurance with public liability extension |
| Temporary accommodation if your unit is uninhabitable | Sometimes (check policy), usually no | Contents insurance with loss-of-use benefit |
| Landlord's fixtures (investment properties) | Building structure yes; landlord-specific risks no | Landlord insurance |
| Tenant's contents | No | Renters/contents insurance (tenant's responsibility) |
In most Australian states, strata insurance covers the original fittings and fixtures of a unit as it was first built — standard kitchen cupboards, bathroom tiles, internal doors. If you have renovated and upgraded these (new stone benchtops, custom cabinetry, timber floors), the gap between original standard and your actual fitout may not be covered without a specific lot owners improvements endorsement. Check your strata policy's definition of what constitutes original structure versus lot owner improvements.
Strata legislation and terminology varies by state. NSW and ACT use "strata scheme" and "owners corporation." Victoria uses "owners corporation" but regulates under the Owners Corporations Act. Queensland and the Northern Territory use "body corporate" under the Body Corporate and Community Management Act. South Australia uses "community corporation." The insurance obligations and what must be insured differ slightly across these jurisdictions — lot owners in Queensland have historically had more specific building coverage rights than in some other states. If you own in multiple states, do not assume the rules are identical.
Underinsurance is a significant risk in strata schemes, particularly in buildings that have not had a professional insurance valuation in several years. Construction costs have risen sharply since 2021 — a building insured to rebuild for $10 million in 2019 may require $15 million or more to rebuild today. The owners corporation is required to hold insurance for the full replacement cost of the building, but this amount is set by the committee and may be based on outdated valuations.
As a lot owner, you are entitled to see the strata insurance certificate and the sum insured. You can request this from your strata manager. If the sum insured has not been updated recently or was not set by a professional quantity surveyor valuation, it is worth raising at the next owners corporation meeting. If the building is underinsured and a major loss event occurs, lot owners collectively bear the shortfall.
Your contribution to strata insurance is embedded in your quarterly or annual strata levies. The owners corporation arranges and pays the policy; levies are calculated to cover this cost plus building management, maintenance, and the sinking fund. You do not see the strata insurance premium separately unless you request the committee's financial statements. Some strata schemes are chronically over-paying for insurance because the committee has not reviewed the policy or gone to market in years — this is not uncommon in older buildings with passive committees.
If you own and live in an apartment: you need contents insurance. This covers your belongings, your personal liability, and typically provides some cover for lot owner improvements. The premium for contents insurance for an apartment is usually lower than for a freestanding house because the building itself is insured separately. You are not double-insuring the structure — you are covering what the strata policy deliberately excludes.
If you are an investor renting out an apartment: you need landlord insurance rather than standard contents insurance. Landlord insurance covers rental default, tenant damage, loss of rent, and your fixtures — risks that a standard contents policy does not cover.
Check whether your home or contents insurance is competitive for your situation.
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