What is strata building insurance?
Strata building insurance is a compulsory part of the strata insurance that body corporates purchase to cover the building and many assets on a strata property if they're damaged or destroyed. These include not only the building itself but also common property - sheds, carports, fences, balconies, lighting and fixed items within units.
What does it cover?
Strata building insurance protects against any damage to the common property, such as the building’s structure, walls, roofs, and shared spaces. Strata insurance ensures that any damage to these areas, whether from a fire, flood, storm, vandalism, or other covered events is repaired.
This type of insurance aims to safeguard the collective interests of all unit owners within the strata scheme, ensuring that any damage or loss is promptly addressed without imposing a financial burden on individual owners.
Building strata insurance typically does not cover routine maintenance or building defects. These are generally the responsibility of the Owners Corporation also commonly known as strata company or body corporate, depending on the state.
There’s more to a building than meets the eye.
- Structural Elements: Walls, foundations, formwork, roofing, ceilings, plumbing, wiring, guttering and downpipes, glass windows, doors, fire exits, garage doors
- Shared Facilities: Steps, lifts, stairwells, common gardens, rainwater tanks, irrigation systems, swimming pools, basements, garbage chutes and bin rooms, sheds and gyms.
- Exterior Areas: Driveways, fences, gates, outdoor lighting, garages, carports, gazebos, patios and sun rooms, balconies and balustrades, sewers and septic tanks systems, letterboxes, cooling towers, external and common-area lighting and security
- Interior Elements: oven/stove, fixed kitchen cupboards, fixed bathroom vanity, shower screens
What’s not covered in building insurance for strata properties?
Building insurance for strata properties typically excludes the contents within individual units. This includes unit owners’ personal belongings and items such as carpets, curtains, blinds, furniture, and appliances not wired into the premises.
Here are some of the other things strata insurance typically doesn’t cover:
- Maintenance: Routine maintenance and repairs for minor wear and tear are not usually covered by strata insurance. Examples include a leaking tap or peeling paint. These are the responsibility of the Owners Corporation or body corporate.
- Building defects: Defects such as issues stemming from faulty workmanship are not covered.
- Damage due to neglect: Damage resulting from lack of proper maintenance typically isn’t covered. This includes minor issues that later become major problems such as cracked walls that worsen over time.
- Pest damage: Strata insurance doesn’t cover pest infestation or removal costs.
- Intentional damage: Deliberate damage caused by residents or their guests is not covered by strata insurance.
You can liken strata building insurance to car insurance; you can insure your vehicle against accidents but not against normal wear and tear.
Insure your strata building in your local state:
In Queensland, strata insurance is commonly known as "body corporate insurance." It is governed by the Body Corporate and Community Management Act 1997 (QLD). This insurance covers structural elements, shared facilities, and public liability. Additionally, policies must include coverage for temporary accommodation if the property becomes uninhabitable due to damage.
In New South Wales, strata insurance is regulated under the Strata Schemes Management Act 2015 (NSW). This act requires the owners corporation to obtain strata insurance that covers the building and common areas and public liability. It also mandates that owners corporations manage finances, records, and building defects.
In Victoria, strata insurance is governed by the Owners Corporations Amendment Act 2021 (VIC). Under this legislation, Owners Corporations (previously known as “Body Corporations”) are required to secure certain minimum coverage to protect against structural damage, public liability, and any communal facilities, helping to protect the investment of all owners and ensuring the safety of shared spaces.
In South Australia, strata insurance (also known as body corporate insurance) is regulated by the Strata Titles Act 1988 and the Community Titles Act 1996. Under this legislation, corporations must insure buildings and common property for full replacement value, including public liability coverage. Policies also need to cover temporary accommodation costs if the buildings become uninhabitable.
In Western Australia, strata insurance falls under the Strata Titles Act 1985 (WA). Body corporates and councils of owners in WA are required to take out certain minimum cover to protect against damage to buildings and common property for full replacement value, including public liability and other statutory coverages required by strata-by-law in WA.
Why choose Flex Insurance for covering your strata building
Flexible coverage: It’s all in the name – Flex offers flexible cover options allowing you to customise your coverage to pay only for what you need.
Tailored options: Flex offers tailored cover options suitable for residential strata buildings of all sizes.
24/7 Claims Support: When disaster strikes, our online claims service and emergency assistance are here 24/7 to help you recover quickly.
Strata insurance experts: Flex Insurance is able to utilise over 40 years’ strata insurance expertise from its parent company CHU.
