Strata / Owners Corporation Insurance

Strata insurance, also known as body corporate insurance or owners corporation insurance, is a specialised policy designed for properties governed by strata title arrangements. These include apartments, townhouses, and other multi-unit complexes, where multiple owners share common areas and responsibilities. Strata insurance in Australia is essential to protect the collective interests of property owners and ensure the financial stability of the strata community.

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.

An owners corporation is obliged to take out strata insurance to cover the building, and common contents and property under the management of a strata title or body corporate entity.

The Benefits of Strata Insurance

Financial Protection: Strata insurance ensures that the financial burden of repairing or replacing shared structures and amenities does not fall solely on individual property owners. This helps prevent financial hardship within the strata community.

Legal Coverage: By covering legal liability and defense costs, strata insurance shields the community from potential lawsuits and costly legal disputes, promoting harmony and security among residents.

Maintenance Support: The coverage for machinery and equipment ensures that essential repairs or replacements can be carried out promptly, preserving the quality and functionality of the property.

Peace of Mind: Knowing that your property and shared areas are covered in the event of unforeseen events like fires, storms, or accidents brings peace of mind to both property owners and residents.

Protecting Personal Assets: Office bearers and committee members can confidently fulfill their roles, knowing they have personal liability protection in case of legal issues arising from their positions.

Australian strata apartment building

What's Included in a Strata / Owners Corporation Insurance Policy?

The minimum cover required in a strata insurance policy in Australia is primarily determined by state or territory legislation, and the specific requirements may vary depending on where the strata property is located. However, there are some common elements of minimum coverage that are typically mandated or strongly recommended in most jurisdictions across the country:

Building Insurance

Strata insurance policies in Australia must include coverage for the building or buildings within the strata complex. This coverage typically includes the structural elements of the building, such as walls, floors, ceilings, roofs, and common property areas like hallways and stairwells. The sum insured should be sufficient to cover the full cost of rebuilding the property in case of a total loss, considering factors like construction costs and inflation.

Public Liability Insurance

Strata insurance policies are typically required to include public liability coverage. This insurance protects against legal claims and liability arising from accidents, injuries, or property damage that occur within common areas. It also covers the cost of defending against such claims in court.

For strata guidelines and regulations for each state and territory in Australia, please refer to the respective government websites and regulatory authorities below:

Common Property Insurance in Melbourne

Financial Safeguard: Common Property Insurance in Australia ensures that the expense of repairing or replacing communal facilities does not become the responsibility of individual unit owners. This protection prevents financial strain within the property collective.

Legal Protection: This insurance safeguards the property collective from potential legal actions and the associated costs, fostering a sense of security and cohesion among residents.

Maintenance Assurance: Insurance coverage extends to communal machinery and equipment, allowing for timely repairs or replacements that maintain the property’s condition and functionality.

Assurance of Security: The protection against unexpected incidents such as fires, storms, or other accidents offers peace of mind to both property owners and residents.

Asset Security: Committee members and office bearers are shielded from personal liability concerning their duties, enabling them to manage their roles with confidence.

Common Property Insurance

Additional Types of Cover

Owners Corporations in Australia have the option to consider various additional types of insurance coverage to address specific needs and risks beyond the mandatory requirements. These additional coverages can provide added protection and peace of mind. Some common additional types of cover for Owners Corporations in Australia include:

Machinery and Equipment Insurance

Covers repair/replacement of complex machinery like elevators, AC, boilers, and security systems.

Loss of Rent (Common Property)

Protects income loss for shared areas if they're damaged and unrentable.

Office Bearers' Liability

Safeguards committee members from personal liability for official decisions.

Fidelity Guarantee Insurance

Guards against financial loss due to fraud by strata finance managers.

Common Property Contents

Protects contents in shared spaces (e.g., carpet and paintings in foyers, gyms).

Catastrophe Cover

Enhanced protection for properties in disaster-prone areas.

Architects & Surveyors Fees

Pays fees for post-loss property assessment and planning.

Legal Expenses Insurance

Covers legal costs in disputes, e.g., with contractors.

Voluntary Workers' Comp

Compensates volunteers injured while working for the Owners Corporation.

Get Your Strata / Owners Corporation Insurance Quote Today

Strata insurance in Australia is a vital investment for property owners and strata corporations alike. It provides essential coverage, offers financial security, and ensures the smooth operation of shared spaces. To tailor a strata insurance policy that meets your community's unique needs, contact Midland today.

Either fill out the 'Request A Quote' form on this page and one of our brokers will be in touch, or give us a call on 1300 306 571.

Request A Quote

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