Strata Insurance

Holding strata insurance is mandatory under each state’s relevant strata legislation. However, each state and territory has different legislative requirements that deal with insurance for strata title properties. You should always check that your insurance meets those legislative requirements.

Please call us on 1300 880 768 or email for a no-obligation assessment and a free Strata insurance quote.

We can assist you in all States and Territories however for your interest, we have summarised Victoria’s minimum cover requirements as legislated with additional options following.

Minimum insurance

Insurance is important to protect your Owners Corporation (formerly body corporate) and the personal assets of all lot owners. The law sets out the minimum insurance required but your Owners Corporation may also want to consider extra cover.

The minimum insurance required for an Owners Corporation is:

  • reinstatement and replacement insurance of buildings on common property
  • public liability insurance for the common property. Insurance for common property protects owners in the case of unexpected third partydamage and injuries.

Reinstatement and replacement insurance

All Owners Corporations, except two-lot subdivisions, must take out reinstatement and replacement insurance for all buildings on the common property.

A building is defined as:

  • a structure and part of a building or structure
  • walls, out-buildings, service installations and other things attached to the main structure
  • any pipes or cables used to provide services to a party other than the Owners Corporation or its members (shared services)

The insurance must cover:

  • replacement, repair and rebuilding of the damaged property
  • costs of demolishing and removing debris from the site
  • other costs such as employing an architect or surveyor
  • shared services
  • replacement of services and structures such as driveways and fences.

Public liability insurance

Public liability insurance covers your Owners Corporation’s liability to pay compensation in the case of any:

  • injury, illness or death of a person
  • damage or loss of property.

Owners Corporations with common property, except two-lot subdivisions, must have public liability insurance of not less than $10 million for the common property.

Your Owners Corporation should get professional advice about its level of risk. Some Owners Corporations have lots with different uses (for example, residences and shops), which can mean significant differences in risk.

Additional insurance cover

Your Owners Corporation can, by ordinary resolution at a general meeting, decide to take out any extra insurance that it considers important to safeguard the interests of its lot owners.

This insurance might cover:

  • office bearers’ legal liability
  • voluntary workers insurance (a form of personal accident cover)
  • workers compensation
  • fidelity guarantee
  • machinery breakdown
  • catastrophe insurance
  • lot owners’ improvements to the building
  • legal defence expenses
  • government audit costs
  • appeal expenses
  • common property contents (for items such as carpet and paintings in foyers)

When renewing insurance, all Owners Corporations must ensure that the sum insured is more than the value of the buildings this is usually defined as the Replacement Value.

An Owners Corporation should obtain valuations of the buildings it is required to insure. A prescribed Owners Corporation must:

  • obtain a valuation every five years of all buildings that it is required to insure
  • present the valuer’s report at the next general meeting

Insurance for mixed-use Owners Corporations

Developments with lots used for different purposes, such as shops and homes, are called ‘mixed use’. The cost of insurance may be higher for some lots than others in a mixed-use development.

Other Useful information

Definition of an Owners Corporation

An Owners Corporation (formerly body corporate) manages the common property of a residential, commercial, retail, industrial or mixed-use property development.

  • Strata title is individual ownership of a unit or apartment within a multi-unit complex. At settlement, you will receive a certificate of title for the unit you bought and become a joint owner of the common property (common areas shared by all the unit owners).
  • The unit owners are members of the Owners Corporation (formerly body corporate), which owns and manages the common property.

Do I have to be part of the Owners Corporation?

If you own property affected by an Owners Corporation then you become a member of that Owners Corporation automatically. As a member, you have legal and financial responsibilities to the Owners Corporation.

Extracts from  housing-and-accommodation owners-corporations  insurance

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Confirmation Of What You Have Told Us: Common Area Liability Insurance

Your contract of insurance is based on the information provided to us that is shown below. You must review it and contact Midland Insurance Brokers Australia Pty Ltd Immediately if it is incorrect or incomplete in any way in accordance with your duty of disclosure. Please amend any incorrect information, sign and return the document to Midland Insurance Brokers Australia Pty Ltd.

If all the information below is correct, then sign and return the document to Midland Insurance Brokers Australia Pty Ltd

Covering Property Owners Liability: $10,000,000 Excess: $250

Please make your payment through our secure NAB portal simply by clicking the image below.

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