About Strata Insurance

Who Pays for Strata Insurance?

Strata insurance is a shared expense among all property owners within a strata scheme. The cost is included in the annual strata levies collected by the owners’ corporation or body corporate. The proportion each owner pays is usually determined by the unit entitlement specified in the strata plan.

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Strata Insurance vs. Landlord Insurance

While both strata insurance and landlord insurance provide property protection, they cover different aspects:

• Strata Insurance: Covers shared or common property (e.g., exterior walls, roofs, shared facilities) and liability for injuries in communal areas.

• Landlord Insurance: Covers individual unit contents, loss of rent, tenant damage, and liability within the privately owned unit. For a comprehensive protection strategy, property investors often purchase landlord insurance in addition to the mandatory strata insurance.

 

What Does Strata Insurance Cover?

Strata insurance typically includes coverage for:

• Building and common areas: Covers damage caused by fire, storm, water leaks, and vandalism.

• Public liability: Protects against legal claims for injuries occurring in common areas.

• Contents insurance for shared property: Covers items like gym equipment, lobby furniture, and carpets.

• Catastrophic events: Earthquakes, floods, and bushfires may be covered depending on the policy.

• Loss of rent and temporary accommodation: If a covered event makes units uninhabitable, compensation may be provided.

 

Is Strata Insurance Mandatory in Australia?

Yes, strata insurance is legally required in Australia under state and territory laws. Every strata scheme must have insurance that covers the entire building and common property. Specific requirements vary, but all jurisdictions mandate:

• Building insurance covering full replacement and reinstatement

• Public liability insurance for common areas (minimum $10 million coverage in most states)

Failure to maintain adequate strata insurance can result in fines or legal consequences for the owners’ corporation.

 

How to Choose the Best Strata Insurance?

Selecting the right strata insurance involves:

1. Comparing policies: Look at coverage limits, exclusions, and premium costs.

2. Assessing risk factors: Consider location, building age, and past claims.

3. Ensuring compliance: Check state laws and strata bylaws for insurance requirements.

4. Evaluating insurer reputation: Choose a provider with a strong track record in strata insurance.

5. Seeking professional advice: Consulting a strata insurance broker can help tailor coverage to specific needs.

6. That's where we come in, we compare insurer's for you and provide the most competitive options whilst maintaining the cover you need.

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Best Strata Insurance Companies in Australia

Several reputable insurers offer strata insurance in Australia, including:

• CHU Underwriting Agencies – A leading strata insurance specialist.

• QBE Insurance – May offer Strata insurance options through their direct market channel

• Strata Community Insurance – Focuses on flexible and customizable policies.

• Allianz Strata Insurance – Covers buildings and common areas with additional optional coverages.

• Hutch Underwriting – Offers competitive strata insurance options, these quotes are only available through a broker channel such as Strong Insurance.

• AAMI Strata Insurance – May offer Strata insurance options through their direct market channel

• Flex Underwriting - This was previously the lower costing option through CHU but have since become underwritten through Lloyds, Flex policies may only be available through broker channels and not directly to the customer. We can acquire a flex quote through our broker channels for you. 

• Axis underwriting - This can be a competitive option and provide good well rounded cover, usually has a minimum excess of $2,000. This is only available through a Broker and often requires the broker to hold the cover for 1 year prior to placing with Axis. We can acquire an Axis insurance quote for you. 

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Comparing providers based on coverage, customer service, and claims processing efficiency is crucial in choosing the right insurer.

 

Strata Insurance Claims Process

Filing a strata insurance claim typically involves the following steps:

1. Report the incident: Notify the strata manager or owners’ corporation.

2. Document damages: Provide photos, invoices, and a detailed description.

3. Lodge the claim: The owners’ corporation submits a claim with the insurer or through the insurance broker. 

4. Assessment: The insurer reviews the claim and may send an assessor to inspect.

5. Claim resolution: If approved, repairs or financial compensation are provided.

6. Dispute resolution: If a claim is denied, policyholders can request a review or escalate it to an ombudsman.

 

Strata Insurance Regulations in Australia

Each Australian state and territory has its own strata insurance regulations:

• New South Wales: Must cover full building replacement and public liability.

• Victoria: Requires insurance for shared property, including lifts and car parks.

• Queensland: Mandates comprehensive building and liability insurance.

• Western Australia: Minimum insurance for common areas, with additional coverage advised.

• South Australia, Tasmania, NT, and ACT: Similar requirements, emphasizing full replacement cost and legal liability.

Understanding the regulations in your state ensures compliance and adequate protection for all property owners within a strata scheme.