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Strata insurance is generally a legal obligation for Australian strata schemes, but the exact requirements differ between states and territories. This guide explains how obligations commonly work, what committees and owners should check, and why scheme type, location and policy wording matter.
Strata insurance is generally required for Australian strata-titled properties, but the rules are not identical in every state and territory. The responsible strata body may be called an owners corporation, body corporate, strata company or corporation, and each jurisdiction has its own legislation, terminology and compliance expectations.
This article explains the broad strata insurance requirements across Australia, including what is usually compulsory, how state and territory rules can differ, and what strata committees, owners corporations, body corporates, strata managers and apartment owners should check before renewal or when comparing policies. It is general information only and does not replace legal, strata management or insurance advice for a specific scheme.
Is strata insurance compulsory in Australia?
For most strata schemes in Australia, some form of strata insurance is compulsory. The obligation usually sits with the collective strata entity rather than individual lot owners. Depending on the jurisdiction, that entity may be responsible for arranging insurance for the building, common property, shared assets and public liability exposures.
The purpose is to protect the interests of all owners in shared property and to reduce the risk that owners have to fund major repairs, reinstatement costs or liability claims directly after an insured event. Common examples include damage from fire, storm, burst pipes or impact, as well as liability claims arising from incidents in common areas.
However, compulsory strata insurance does not mean every possible risk is covered. Policy terms, exclusions, excesses, insured values and the legal boundaries between common property and lot property all matter. For a broader explanation of what policies may include, see What Does Strata Insurance Cover? A Comprehensive Breakdown.
What is usually mandatory and what is usually optional?
Although legislation differs, strata insurance requirements commonly focus on core protections for the shared building and common property. Optional cover may be arranged where the scheme has additional risks or where owners want broader protection than the legal minimum.
| Cover type | How it is commonly treated | What to check |
|---|
| Building or reinstatement insurance | Usually a key legal requirement for strata buildings and common property. | Whether the sum insured reflects current rebuild, demolition, professional fee and compliance costs. |
| Common property and shared assets | Often required where the strata body owns or manages shared assets. | Whether lifts, pools, gates, car parks, gardens, plant, equipment and other shared facilities are included where relevant. |
| Public liability insurance | Commonly required, with minimum requirements set by the relevant jurisdiction. | The applicable statutory minimum, the scheme's risk profile and whether higher limits should be considered. |
| Office bearers or committee liability | May be optional or strongly recommended depending on the scheme and provider. | Whether committee members, office bearers and volunteers have suitable protection for the scheme's circumstances. |
| Machinery breakdown, catastrophe, temporary accommodation or loss of rent | Often optional or dependent on policy wording. | Whether the building has lifts, pumps or other equipment, and how owners or tenants may be affected after a major insured event. |
| Individual contents, landlord cover or tenant contents | Usually the responsibility of individual lot owners or residents, not the strata body. | Whether the owner or resident needs their own policy for personal belongings, fixtures, improvements, rent or personal liability. |
Strata insurance requirements by state and territory
The table below summarises how strata insurance obligations are commonly framed across Australia. It is a practical overview, not a substitute for checking the current legislation, regulations and scheme documents that apply to your property.
| Jurisdiction | Common strata entity name | General insurance requirement | Practical compliance check |
|---|
| New South Wales | Owners corporation | NSW strata schemes generally require insurance for the building and common property, as well as public liability insurance in line with statutory requirements. | Check that the owners corporation has insured the building for reinstatement or replacement, that common property is properly captured, and that the public liability limit meets current NSW requirements. |
| Victoria | Owners corporation | Victorian owners corporations are generally required to insure buildings and common property where applicable, with public liability cover also an important statutory obligation. | Confirm whether the scheme is prescribed or non-prescribed, what property the owners corporation must insure, and whether the valuation and liability arrangements are current. |
| Queensland | Body corporate | Queensland body corporate insurance requirements depend on the plan type and property structure. Building format plans commonly involve body corporate insurance for the building and common property, while other structures can be different. | Identify the plan type, lot boundaries and body corporate assets before assuming what the body corporate must insure. Public risk insurance should also be reviewed against current requirements. |
| Western Australia | Strata company | WA strata companies generally have obligations to insure insurable assets and arrange public liability cover, subject to the scheme type and applicable legislation. | Review whether all insurable assets are included, whether the replacement value is current, and whether scheme-specific assets such as driveways, gates or shared services are covered. |
| South Australia | Strata corporation or community corporation | SA schemes commonly require insurance for buildings, common property and public liability, with requirements depending on whether the property is under strata or community title arrangements. | Confirm whether the scheme is strata title or community title, then check the corporation's responsibilities for shared property, buildings and liability exposures. |
| Tasmania | Body corporate | Tasmanian strata schemes generally require insurance for the building and common property, together with public liability cover for shared areas and body corporate responsibilities. | Check the policy schedule against the strata plan, shared facilities and common property obligations, and review valuations regularly. |
| Australian Capital Territory | Owners corporation | ACT unit title schemes generally require the owners corporation to insure relevant buildings, common property and public liability risks. | Review the units plan, building structure, common property and any shared facilities to confirm what the owners corporation must insure. |
| Northern Territory | Body corporate | NT unit title and strata-style schemes generally require insurance for relevant buildings, common property and public liability exposures. | Check the scheme documents, insured property definitions and any climate or location-related risks that may affect cover availability, exclusions or premiums. |
Why requirements vary between jurisdictions
Strata insurance requirements vary because each state and territory has its own strata, community title or unit title legislation. The differences can affect:
- the name and responsibilities of the strata entity;
- which parts of the building are treated as common property;
- whether the strata body must insure the whole building or only certain shared parts;
- minimum public liability requirements;
- valuation and reinstatement expectations;
- requirements for mixed-use, staged or community title developments;
- how decisions are approved by owners at meetings; and
- how levies are raised to fund premiums and excesses.
Even within the same jurisdiction, two schemes may have different insurance responsibilities because their plan type, by-laws, building layout and ownership boundaries differ. A small townhouse complex, a high-rise apartment tower and a mixed-use building with retail lots can all raise different insurance questions.
Owner responsibilities versus strata responsibilities
A common misconception is that strata insurance covers everything inside every lot. In many cases, it does not. Strata insurance usually focuses on common property, shared assets and the building components the strata body is legally responsible for insuring.
Individual owners may still need to consider their own insurance for personal contents, internal improvements, landlord risks, tenant-related risks or personal liability. Tenants may need their own contents insurance. The exact split depends on the state or territory, the strata plan, the policy wording and the nature of the property.
For example, the strata policy may cover a shared hallway, roof or lift, but it may not cover an owner's furniture, electronics or tenant's belongings. It may also exclude damage caused by poor maintenance, gradual deterioration or certain types of water ingress, depending on the policy wording.
How strata committees and managers can check compliance
Checking strata insurance compliance is more than confirming that a policy exists. Committees and managers should understand what the scheme is legally required to insure and whether the policy aligns with the property's actual risk profile.
- Identify the correct jurisdiction and scheme type. Confirm the state or territory, plan type and legal structure of the property.
- Review the strata plan and by-laws. These documents help clarify common property, lot boundaries and shared assets.
- Check the policy schedule. Confirm the insured property, sums insured, liability limits, excesses, exclusions and optional covers.
- Consider an updated valuation. Rebuild costs can change over time due to construction prices, building code requirements, demolition costs and professional fees.
- Review public liability arrangements. Make sure the cover meets the relevant jurisdiction's requirements and reflects the scheme's facilities and visitor exposure.
- Assess known risks and maintenance issues. Insurers may consider defects, water damage history, fire safety, cladding, lifts, pools, security and previous claims.
- Document decisions. Keep clear records of quotes, advice, valuations, meeting resolutions and reasons for choosing a policy.
- Review cover before renewal. Do not assume last year's policy remains adequate if the building, claims history, occupancy or legal requirements have changed.
When professional assistance may be useful
Professional assistance can be useful where the scheme has complex legal boundaries, a history of claims, building defects, mixed residential and commercial use, short-stay accommodation, high-value shared facilities or difficulty obtaining competitive terms. A broker, strata manager, lawyer or building valuation professional may each play a different role depending on the issue.
Insurance brokers can help committees compare policy terms, explain exclusions and present options from available insurers. They cannot guarantee that a policy will be offered, that a claim will be accepted or that a particular premium will apply, because insurer decisions depend on underwriting criteria and the scheme's circumstances. If your committee wants help understanding available options, you can review the Brokers page for more information.
From legal obligation to policy comparison
Once the committee understands the legal requirement, the next step is to compare policies on more than price. Premiums matter, but so do cover limits, exclusions, excesses, claims support, insurer requirements and the suitability of optional extensions for the building.
Before requesting a strata insurance quote, it can help to gather:
- the strata plan and scheme details;
- current policy schedule and renewal notice;
- recent insurance valuations or building reports;
- claims history;
- details of lifts, pools, gyms, gates, car stackers or other shared equipment;
- information about commercial lots or short-term letting, if relevant;
- known defects, maintenance issues or risk improvements; and
- current levy and budget information for premium planning.
Committees that are ready to compare options can start from the Strata Insurance Online homepage, while remembering that pricing, availability and policy terms depend on the insurer, the property and the information provided.
Common mistakes to avoid
- Assuming the same rules apply nationwide. Strata insurance NSW requirements are not identical to strata insurance Victoria or strata insurance Queensland requirements.
- Insuring based only on last year's figures. Rebuild costs, labour costs and compliance costs can change.
- Confusing market value with replacement value. A building's sale value is not the same as the cost to demolish, rebuild and meet current standards after a major loss.
- Ignoring public liability. Shared areas can create liability exposures for visitors, residents, contractors and volunteers.
- Overlooking exclusions. Flood, defects, gradual damage, maintenance-related issues and certain high-risk features may be treated differently by different insurers.
- Not explaining owner responsibilities. Owners may wrongly assume the strata policy covers their contents, landlord risks or internal improvements.
- Leaving renewal too late. Complex schemes may need more time to obtain valuations, answer insurer questions and compare options.
Conclusion
Strata insurance is generally compulsory for Australian strata schemes, but the details depend on the state or territory, the legal structure of the scheme, the plan type and the property itself. Most schemes need to insure the building or common property and hold public liability cover, but the exact responsibilities and minimum requirements should be checked against the relevant jurisdiction and scheme documents.
For strata committees, owners corporations, body corporates and strata managers, the safest approach is to review insurance obligations regularly, keep valuations and records up to date, understand the difference between strata and owner responsibilities, and compare policies on cover quality as well as cost. Getting the requirements right can help protect owners, support compliance and reduce avoidable disputes when a claim occurs.
Published: Saturday, 1st Mar 2025
Author: Paige Estritori
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