Own a unit or apartment? Understand your strata insurance obligations
Building insurance, common property, body corporate fees, and strata living come with shared insurance responsibilities. As a founder, protecting your personal assets, understanding what's covered (and what's not) is essential.
What could go wrong
Strata living means shared insurance, and shared risk. Many unit owners assume that body corporate insurance covers everything, only to discover after a major incident that their renovations, contents, and personal liability aren't covered at all. If the building's insurance is inadequate, all owners may be subject to special levies to cover any shortfalls.
The building fire
A fire breaks out in another unit and quickly spreads through the building. Your unit suffers smoke and water damage: $85,000* . The building's common areas need $2.5 million* in repairs.
Your body corporate strata insurance covers the building and common property, but it does not cover your contents and improvements inside your unit. Without your own insurance, you lose $85,000* .
The burst pipe in common property
A pipe in the common property wall bursts, flooding your ground-floor unit. Damage to your flooring, furniture, and belongings: $45,000* .
The body corporate's strata insurance covers the pipe repair, but not your contents. You're left with the bill.
The balcony collapse
Your balcony (common property) collapses due to structural defects. Someone is injured.
They're suing for $200,000* . The body corporate's strata insurance handles this, but if the building's insurance is inadequate or if there are gaps, individual owners may be assessed additional costs through special levies.
What this actually covers
Strata Insurance
Strata Insurance is complex because it's split between body corporate cover and individual owner responsibilities:
Body corporate strata insurance (managed by owners' corporation):
- Building structure (walls, roof, foundations)
- Common property (foyers, hallways, lifts, pools, gyms)
- Original fixtures in units (basic kitchen, bathroom as built)
- Public liability for common areas
- Body corporate office bearers' liability
- Building works and renovations to common property
What strata insurance does NOT cover:
- Your contents and belongings inside your unit
- Renovations or improvements you've made
- Damage to your belongings from common property issues
- Your personal liability inside your unit
- Loss of rent if you rent out your unit
What you need separately (contents & improvements insurance):
- All your belongings (furniture, electronics, clothing)
- Renovations and improvements (upgraded kitchen, bathroom, flooring)
- Temporary accommodation if your unit is uninhabitable
- Personal liability inside your unit
- Loss of rent (if investment property)
When you need this
Understanding your obligations
You're covered by body corporate strata insurance for:
- Building structure and common property (automatic through body corporate fees)
- Basic original fit-out (as built by developer)
You must arrange separately:
- Home & Contents Insurance for your contents
- Fixtures and improvements cover for renovations
- Loss of rent cover if you rent it out
For founders and business owners owning units
Key considerations
- Review body corporate insurance annually (check coverage limits)
- Understand what the body corporate policy actually covers
- Don't assume renovations are covered, they're almost never covered by strata insurance
- Check if the body corporate has adequate building insurance (request a copy of the policy)
Common questions
Don't my body corporate fees cover all insurance?
Body corporate fees include building insurance for common property and structure, but NOT your contents, improvements, or personal liability inside your unit. You must arrange your own contents insurance separately.
What if I've renovated my kitchen and bathroom?
Body corporate insurance only covers original fit-out (basic kitchen/bathroom as built). Your $50k renovation isn't covered unless you have fixtures & improvements insurance. This is a separate add-on to contents insurance.
Who pays if there's a major claim and insurance isn't enough?
If body corporate insurance is inadequate, the owners’ corporation may levy all owners to cover the shortfall. This is why you should review the body corporate's insurance annually; underinsurance affects all owners.
What if water damage from another unit affects mine?
Body corporate insurance covers repairs to the building and common areas of the property. Your contents insurance covers your damaged belongings. If another owner is negligent, you may be able to recover costs from them (or their insurer) through legal action.
Do I need insurance if I'm just renting?
Yes! If you're a tenant, you need contents insurance for your belongings. The landlord's insurance covers the building and common areas, but not your personal belongings.
What's the difference between 'on title' and 'not on title' fixtures?
'On title' improvements (structural changes approved by body corporate) may be covered by body corporate insurance. 'Not on title' improvements (cosmetic upgrades, appliances) are definitely not covered; you must insure these separately.
What else might I need?
Strata living creates shared insurance obligations:
If you own the unit and live in it:
You need Home & Contents Insurance with fixtures & improvements cover.
If you rent out your unit:
You need Landlord's Insurance for tenant risks, rent default, and malicious damage.
If you're on the strata committee:
Ensure the body corporate has adequate office bearers' liability insurance to protect committee members from personal liability.
If you work from home in your unit:
Check if your contents insurance limits business equipment (usually $5k-$10k). Add a business equipment extension or get Business & Office Insurance.