By-laws & regulations
Strata legislation in Australia: The laws that govern your scheme
01 Jul 26
5 min read
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By-laws & regulations
A clear guide to strata insurance, what it covers, what owners need to arrange separately and how claims are coordinated.
Bright & Duggan does not act as an insurer or insurance provider.
Policy coverage, premiums, excesses and claim outcomes are determined by the insurer, broker where relevant and the specific policy documents.
Strata insurance is a form of building insurance arranged for a strata scheme, owners corporation or body corporate. It helps protect the shared parts of a property, including the building structure, common property and certain shared assets, depending on the policy and the type of scheme.
This typically covers areas such as roofs, external walls, foyers, stairwells, lifts, shared gardens, pools, car parks, fences and other common facilities, depending on the property and the policy.
Strata insurance is different from home insurance because it is arranged for the shared property of the scheme, not for an individual dwelling. It is also different from contents insurance, which usually remains the responsibility of each lot owner or occupier for their personal belongings inside the lot.
Strata insurance is generally required for strata, body corporate, owners corporation and unit title schemes in Australia, but the exact requirements vary by state, territory and scheme type.
Owners corporations must hold required strata insurance under the Strata Schemes Management Act 2015.
This generally includes building insurance and public liability insurance, with a minimum public liability cover of $20 million. Some two lot strata schemes may be exempt from building insurance requirements if specific conditions are met.
Body corporate insurance obligations depend partly on the scheme’s plan type.
Building format plan schemes generally require body corporate building insurance, while standard format plan schemes can have different responsibilities, especially where buildings are standalone and do not share common walls. Public risk insurance is required for common property and relevant body corporate assets, with minimum cover of $10 million.
Owners corporations generally need reinstatement and replacement insurance for buildings on common property and public liability insurance for common property, with minimum public liability cover of $20 million. Exemptions can apply to some two lot subdivisions and specific owners corporation types.
Owners corporations under unit title schemes must generally insure buildings for their replacement value and hold public liability insurance with minimum cover of $10 million under ACT unit titles legislation. Some exemptions from building insurance may apply depending on the type of units plan.
Committees and lot owners should always check the relevant legislation, scheme documents and insurance policy for their property.
Strata insurance cover depends on the policy, insurer, building type and state or territory requirements. In general, it is designed to protect the insured building, common property and shared assets of a strata property.
Strata insurance is designed to protect the scheme’s insured building, common property and shared property or assets. It does not usually replace an owner’s own contents, landlord or home insurance.
Owners and tenants are generally responsible for arranging their own cover for personal belongings, internal contents, rental risks and some improvements inside their lot. Even where damage starts from a common property issue, such as a leak, personal contents may not automatically be covered by the owners corporation or body corporate policy.
Strata insurance generally does not cover:
Owners should check the scheme’s insurance documents and their own personal insurance arrangements to understand where shared cover ends and individual responsibility begins.
Strata insurance involves several parties, each with a distinct role in the process.
Strata insurance premiums are usually paid by the scheme from funds collected through strata levies.
These costs are typically included in the scheme’s approved budget and shared between owners through strata levies, according to the relevant contribution schedule, lot entitlement or body corporate rules.
This means owners do not usually pay the strata insurance premium as a separate individual bill. Instead, the cost forms part of the broader levy contributions used to manage insurance, repairs, maintenance, administration and common property expenses.
When damage occurs, the first step is to understand whether the issue affects common property, an individual lot or both.
The claim process can vary depending on the policy, insurer, damage type and circumstances, but most claims follow a similar path.
For example, if a pipe bursts in the roof and floods a common corridor, the first step is usually to make the area safe, document the damage and confirm whether common property is involved. The strata manager may then help coordinate reports, repair information and claim documents with the committee, insurer or broker where relevant.
Damage should be reported as soon as possible. Depending on the situation, it may be reported by an owner, resident, committee member, building manager or contractor.
Photos, dates, descriptions and supporting documents can help clarify what happened. If the damage affects common property or may involve the strata insurance policy, the strata manager or committee should usually be notified.
A strata insurance claim is usually lodged with the insurer using information from the scheme. This may include photos, reports, repair details, quotes and other supporting documents.
The strata manager may help coordinate the information and communication between the committee, insurer or broker where relevant. The insurer assesses the claim and confirms whether the damage is covered under the policy.
A strata insurance excess is the amount payable towards a claim. Who pays the excess can depend on the cause of the damage, the policy, the scheme’s rules and the circumstances of the claim.
Some claims are resolved quickly. Others take longer, especially if further reports, quotes, assessments or investigations are required.
The strata manager may help track progress, follow up with relevant parties and communicate updates to the committee or affected owners. The insurer remains responsible for confirming the claim outcome.
A certificate of currency is a document that confirms an insurance policy is current for a strata property, owners corporation or body corporate.
It is often requested by lot owners, buyers, lenders, conveyancers or solicitors when proof of insurance is needed. The certificate usually includes key details such as the insured property, policy period, insurer and type of cover held.
A certificate of currency does not explain every detail of the policy or confirm whether a specific claim will be covered. Owners should always refer to the full policy documents and the insurer’s assessment.
As part of strata management, Bright & Duggan helps committees and owners access insurance documents where available, including certificate of currency requests for managed properties.
Bright & Duggan helps committees and owners access the right documents, coordinate claims information and understand the next steps through their strata management team.
Understand the rules that apply inside a strata scheme, including pets, noise, parking, renovations and breaches.
Understand how strata contributions work, what they usually cover and what owners should check on levy notices.
Learn how repair responsibilities are usually managed and when issues should be reported.
For state-specific guidance around strata insurance, body corporate insurance, owners corporation insurance and unit title insurance, refer to the relevant authority in your state or territory:
The information on this page is general in nature and does not constitute legal, financial or professional advice. Requirements, processes and obligations can vary by state, territory and individual scheme. Before making decisions, we recommend seeking independent advice specific to your scheme, property and jurisdiction.
