The Complete Guide to Strata Insurance: What Owners and Residents Need to Know

Strata insurance is a critical component of property ownership in NSW, especially for apartment buildings and multi-unit complexes. Whether you own a luxury apartment in Sydney or manage a high-rise, understanding how strata insurance works can save you from unexpected costs and ensure compliance with the law.

Clarke Lyons Insurance specialises in helping strata owners and committees secure comprehensive, tailored coverage for their properties.

What Is Strata Insurance?

Strata insurance is a policy that covers the common property and shared areas of a strata scheme. It is mandatory in NSW under the Strata Schemes Management Act 2015.

Unlike personal contents insurance, strata insurance protects the building’s structure, shared facilities, and communal areas — including walls, roofs, lifts, pools, gyms, and lobbies.

What Does Strata Insurance Cover?

A typical strata insurance policy includes:

• Building and Common Property: Structural elements, hallways, roofs, lifts, and shared utilities.

• Fixtures and Fittings: Carpets, elevators, fire safety equipment, and other fixed assets in common areas.

• Public Liability: Covers injuries or accidents on common property.

• Optional Extensions: Flood, earthquake, machinery breakdown, or catastrophe coverage depending on risk and location.

What Isn’t Covered?

It’s important to know what strata insurance doesn’t cover:

• Individual apartment contents or personal belongings.

• Renovations or upgrades unless specifically included.

• Personal liability for incidents inside your own apartment.

Residents typically need separate contents insurance to protect their furniture, electronics, and valuables.

Strata Insurance for Luxury Apartments

High-end or prestige properties have unique risks:

• High-Value Fixtures: Imported finishes, stone flooring, designer kitchens.

• Premium Amenities: Pools, gyms, concierge areas, rooftop gardens.

• Larger Claims Exposure: Luxury apartments increase the potential cost of rebuilding.

Tailored strata policies ensure that the sum insured reflects actual replacement costs, helping avoid underinsurance.

The Role of the Strata Committee

The strata committee has a legal responsibility to:

• Ensure the scheme has adequate strata insurance.

• Choose a broker or insurer who understands the property’s risks.

• Review sums insured regularly to account for rising construction costs.

• Facilitate claims and manage compliance efficiently.

Why Work With Clarke Lyons Insurance

Specialist strata brokers, like Clarke Lyons Insurance, provide:

• Expert Advice: Access to insurers familiar with luxury and high-rise properties.

• Independent Comparison: Evaluate multiple policies to find the best coverage and price.

• Claims Support: Assistance with valuations, claims management, and risk mitigation.

Working with an experienced broker ensures your property is fully protected, compliant, and financially secure.

Frequently Asked Questions (FAQs)

1. Is strata insurance compulsory in NSW? Yes. All strata schemes in NSW must maintain insurance for the building and common property under the Strata Schemes Management Act 2015.

2. What is the difference between strata insurance and contents insurance? Strata insurance covers the building structure and common areas, while contents insurance protects personal belongings inside your apartment. Both are important for complete protection.

3. Does strata insurance cover damage inside my apartment? Generally, no. Damage inside your apartment is the responsibility of the owner and requires individual contents insurance. Some policies may cover structural damage caused by insured events affecting the building.

4. How often should a strata insurance policy be reviewed? Annually. Reviews ensure sums insured reflect current replacement costs, and optional extensions are adequate for changing risks, such as flooding or new amenities.

5. Who chooses the strata insurance provider? The strata committee selects the insurer, often with advice from a specialist broker. They ensure the policy meets legal requirements and provides adequate coverage for the scheme.