Strata Insurance Costs Australia: How to Compare Renewal Quotes
Comparing strata insurance quotes means comparing the total price, insured values, excesses, exclusions and selected benefits together. A lower premium can be worthwhile, but only once the committee understands what has changed.
For an owners corporation or body corporate, insurance renewal is an opportunity to check whether the policy still reflects the building, its condition and its insurance requirements.
The most useful starting point is a clear question: what are we paying for, and what would the scheme need to fund itself after a claim?
This guide explains how to assess strata insurance costs, compare quotations and prepare a more complete renewal submission.
How Much Does Strata Insurance Cost?
There is no single strata insurance price that reliably applies to every Australian building.
A small townhouse scheme, a residential tower with lifts and basement parking, and a mixed-use development with commercial occupancies need different assessments.
When requesting a quote, expect to provide information about:
The building’s address, construction and age.
The number of lots and their uses.
The building sum insured.
Shared facilities and installed equipment.
Claims history and outstanding claims.
Known defects and planned repairs.
Selected cover and excesses.
A price quoted for another scheme is therefore only a limited comparison. Even neighbouring buildings may have different construction, maintenance histories, facilities and insurance terms.
Is a Cost-Per-Lot Comparison Useful?
Dividing the total annual insurance cost by the number of lots can help explain the scheme’s budget. It does not establish whether a quotation is competitive or adequate.
For example, a building with more lots may spread the cost of shared infrastructure across more owners. Another scheme may have fewer lots but substantial lifts, retaining walls or basement facilities.
Use cost per lot as a budgeting measure, then compare the actual insurance arrangements.
Why Has the Strata Insurance Renewal Changed?
Ask for a written explanation of the differences between the expiring policy and the renewal.
A useful review separates:
Changes to the building sum insured.
Changes to the insurer’s premium.
Changes to cover, limits or excesses.
Changes to fees and other charges.
Updated information about the building.
New conditions or exclusions.
This makes the increase or decrease easier to understand. A change in the total invoice does not, by itself, show which part of the insurance arrangement has changed.
If the building sum insured has increased, ask what supports the new figure. If an excess has increased, ask which events it applies to and whether alternatives are available.
Check the Building Value Before Comparing Prices
The building sum insured should have a sound rebuilding basis. Apartment sale prices and the combined market value of the lots do not provide a reliable substitute.
Reconstruction costs can be affected by labour, materials, site constraints and building requirements. They may change differently from property sale prices.
Before obtaining alternative quotations, establish whether the existing reinstatement assessment remains suitable.
Questions for the committee include:
When was the building last assessed for insurance purposes?
Have substantial improvements or additions been completed?
Are shared structures and installations accounted for?
How are demolition, debris removal and professional fees treated?
Does the assessment address the relevant reconstruction period?
Ask the broker to explain how the valuation translates into the policy’s sums insured and limits.
Reducing the building value simply to achieve a target premium can create a funding gap after damage. Any change should be supported by an appropriate assessment.
Compare Excesses Alongside the Premium
An excess is the amount payable towards a claim under the applicable policy terms.
The headline excess may not be the only one. A quotation can contain different excesses for particular events, property conditions or types of claim.
CHU, for example, explains that excesses may be adjusted or imposed because of claims history, defects or other underwriting considerations. Where an excess is selectable, changing it can affect the premium.
For each quotation, identify:
The standard property excess.
Any separate water damage excess.
Other event-specific or imposed excesses.
How an excess applies to a claim or occurrence.
Whether the scheme can comfortably fund that amount.
A Hypothetical Quote Comparison
Suppose two otherwise comparable quotations have these terms:
Quote A: $18,000 annual cost and a $2,000 water damage excess.
Quote B: $16,500 annual cost and a $10,000 water damage excess.
Quote B saves $1,500 upfront. It also increases the contribution towards one sufficiently large, covered water damage claim by $8,000.
That does not automatically make Quote B unsuitable. It does mean the committee should consciously assess whether the saving justifies the additional amount the scheme may need to fund.
These figures are illustrative, not market pricing or a prediction of claims.
Read Building-Specific Exclusions and Conditions
A product brochure describes the insurer’s offering. The quotation and endorsements explain the terms proposed for the particular building.
Check whether the insurer has imposed:
An exclusion connected with an identified defect.
A requirement to complete repairs or provide reports.
A special excess for a particular exposure.
A restriction affecting certain property or activities.
Conditions that must be satisfied before cover starts.
Request an explanation of each material difference between quotations.
A useful question is: “What claim could receive a different response under these two options?”
That encourages a practical comparison instead of a list of similar-looking policy headings.
How Do Building Defects Affect Strata Insurance?
Known defects can influence an insurer’s assessment of the building. CHU identifies defect severity, building age and repair plans among the factors considered when determining cover, premiums and excesses.
Prepare a clear account of the situation rather than submitting disconnected reports.
For each significant issue, record:
What has been identified.
Which areas are affected.
What professional advice has been obtained.
What work has been completed.
What remains outstanding.
The proposed timing and funding of further work.
Completed repairs should be supported by suitable documentation. Ask whether the insurer will review an imposed condition or excess once the required evidence is available.
Do not assume repairs guarantee a lower premium or removal of an exclusion. Obtain the insurer’s decision in writing.
Compare Fees, Commissions and the Total Amount Payable
A renewal comparison should explain the entire amount the scheme is being asked to pay.
Request a breakdown identifying the insurer premium, applicable taxes and charges, broker fees, commissions and any other relevant service or payment costs. Ask which amounts are already included so that they are not counted twice.
Also establish who receives each fee or commission and what services are provided.
In NSW, strata managing agent disclosure requirements address insurance commissions, broker fees and their recipients. Committees should check the rules applicable to their own jurisdiction and arrangements.
The purpose of this review is to understand both cost and service. Ask who will:
Prepare and check the insurance submission.
Explain differences between quotations.
Manage policy changes during the year.
Assist with claims.
Track outstanding insurer requirements.
Prepare One Accurate Submission for Every Quote
Alternative quotations are easier to assess when insurers receive consistent information.
Create a renewal pack containing:
The current schedule, wording and endorsements.
The latest relevant insurance valuation.
Building construction and occupancy details.
Claims information, including unresolved matters.
Defect reports and repair documentation.
Details of planned works.
Information about commercial tenants or changes in use.
The cover and excess options the committee wants assessed.
Resolve inconsistent information before seeking quotations. For example, a building description that omits a commercial tenancy may produce a quotation that needs reassessment once the full details are supplied.
Ask the broker to identify which insurers were approached, which provided terms and any significant limitations in the available options.
Can a Strata Scheme Reduce Its Insurance Costs?
There may be opportunities to improve the overall arrangement, but savings cannot be assumed.
Practical steps include checking the accuracy of the submission, documenting completed repairs, reviewing selectable excesses and comparing appropriate alternatives.
Also examine optional sections against the scheme’s needs and statutory obligations. A section should not be removed solely because no recent claim has been made under it.
Avoid relying on three shortcuts:
Lowering the building sum insured without supporting evidence.
Accepting an excess the scheme cannot realistically fund.
Removing cover without understanding the exposure retained.
A useful renewal decision balances the annual cost with the consequences of a claim.
When Should the Strata Insurance Review Begin?
Begin while there is still time to gather information, answer insurer questions and obtain the necessary committee or owners corporation decisions.
Allow additional time where the building has unresolved defects, substantial claims, planned construction work or complex commercial occupancies.
Before replacing an existing policy, confirm the new insurer’s acceptance, commencement date, payment arrangements and any outstanding conditions. Avoid allowing the scheme’s insurance to lapse while quotations are being considered.
Keep a short written record of the chosen option and the reasons for selecting it.
Strata Insurance Renewal FAQs
Is the Cheapest Strata Insurance Quote the Best Option?
It may offer suitable value, but price alone cannot establish that. Compare insured values, excesses, exclusions, selected benefits and service arrangements before deciding.
Can We Increase the Excess to Reduce the Premium?
Ask whether the insurer offers selectable excess options. Some excesses are imposed and may not be negotiable. Consider the scheme’s available funds and the effect of more than one claim.
Does Having No Claims Guarantee a Lower Renewal?
No. A claims-free history does not explain every aspect of the quotation. Ask what changed in the building value, premium, terms and charges.
Should We Compare Residential and Commercial Strata Policies?
The proposed policy should suit the scheme’s actual use. For mixed-use buildings, provide details of all occupancies and ask how insurers classify the property.
Can a Broker Guarantee a Cheaper Strata Policy?
No. Available terms depend on the building, insurer assessment and market options. A useful broker review explains the alternatives and their differences, including where a lower price involves different terms.
Review Your Strata Insurance With Clarke Lyons
Clarke Lyons Insurance helps strata owners, committees and property managers across Australia compare cover, understand policy conditions and arrange strata insurance. Its service includes fee and commission information and claims support.
For your next renewal, bring the current policy, building valuation, claims information and relevant reports together so the available options can be assessed against the same facts.
General information only. Cover and pricing depend on the insurer’s assessment and the selected policy. Statutory requirements vary by jurisdiction.
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