Strata insurance is one of those things everyone pays for, but not everyone fully understands. It usually comes up once a year at renewal time, often rushed, sometimes confusing, and almost always followed by at least one question that starts with, “So… does this actually cover that?”
If you’re part of an owners corporation, manage a commercial property, or sit on a strata committee in Sydney or Parramatta, you’re not alone. This guide explains what is strata insurance, what it covers, and where its limits are, without making it harder than it needs to be.
What Strata Insurance Really Is
At its simplest, strata insurance is a shared insurance policy held by the owners' corporation. It exists to protect the building and the areas everyone uses, rather than anything owned by one person alone.
In NSW, strata schemes are required to hold building insurance. That requirement applies whether the property is residential, commercial, or mixed-use. Instead of every owner insuring the same structure separately, the policy is arranged once and paid for collectively through strata levies.
The goal is consistency. One policy. One insurer. Clear responsibility if something goes wrong.
Does Strata Cover Building Insurance?
This is probably the most common question strata managers hear: Does strata cover building insurance?
In most cases, yes.
Strata insurance generally covers:
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The building’s structure
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Common areas such as foyers, hallways, stairwells, lifts, roofs, and external walls
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Fixed items that were part of the original build, like permanent flooring, bathroom fittings, and built-in cupboards (as shown on the strata plan)
What it does not usually cover are personal belongings or changes made later by individual owners. Renovations, upgraded fixtures, and fit-outs often fall outside the base policy unless they’ve been properly documented and insured separately.
This distinction matters more than people realise especially in older buildings or commercial spaces that have been modified over time.
What Does Strata Insurance Cover?
When someone asks what does strata insurance cover, they’re usually trying to work out whether an issue is a strata problem or a personal one.
While every policy is different, most strata insurance policies include:
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Reinstatement or replacement of the building
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Damage to common property
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Public liability cover for shared areas
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Legal liability for the owners' corporation
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Office bearers’ liability
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Fidelity cover to protect strata funds
Some larger developments operate under strata community insurance, which applies to estates with multiple buildings and shared facilities like driveways, pools, or landscaped areas.
The exact scope is always set out in the policy wording. That’s why reviewing the policy alongside the strata plan is so important.
Do You Need Home Insurance If You Have Strata Insurance?
For most owners, the answer is yes.
Strata insurance looks after the building. It does not usually cover:
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Furniture and personal belongings
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Appliances that aren’t permanently fixed
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Owner-installed upgrades
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Loss of rent or tenant-related issues
Owner-occupiers usually take out contents insurance. Investors often need landlord insurance. These policies work alongside strata insurance, not instead of it.
What About Commercial Strata Insurance?
For business owners, commercial strata insurance deserves closer attention.
Commercial properties often carry more risk. There may be higher foot traffic, heavier equipment, or multiple businesses operating from the same building. All of that affects how insurance should be structured.
Commercial strata insurance may need to allow for:
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Higher public liability limits
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Shared car parks and loading areas
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Machinery or plant in common spaces
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A mix of business types within one building
In areas like Sydney and Parramatta, mixed-use developments are increasingly common. Insurance needs to reflect how the property is actually used day to day, not just how it’s classified on paper.
How Strata Insurance Is Managed
In most schemes, insurance is arranged by the strata manager on behalf of the owners' corporation. This includes:
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Reviewing building valuations
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Checking claims history
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Working with insurers
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Managing renewals and claims
This is where good strata management makes a real difference. Insurance isn’t just a box to tick once a year. Buildings change, risks shift, and policies need to keep up.
That’s why insurance is usually handled as part of broader strata management services rather than as a standalone task.
Getting a Strata Insurance Quote
A strata insurance quote isn’t based on guesswork. Insurers typically look at:
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The age and construction of the building
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Fire safety measures
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Previous claims
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Independent replacement valuations
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Whether the property is residential, commercial, or mixed-use
Accuracy matters here. Underinsurance can leave owners exposed if something major happens. Overinsurance pushes levies higher than they need to be. The right balance comes from clear information and regular review.
Insurance Claims and Repairs
When damage occurs, insurance and maintenance often overlap. A storm, fire, or water leak rarely fits neatly into one category.
Clear steps help keep things moving:
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Confirm whether the issue relates to common property or a private lot
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Notify the strata manager early
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Coordinate insurers, assessors, and contractors
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Align claims with approved repairs and maintenance processes
Delays usually happen when responsibility isn’t clear or when documentation is missing.
Records and Paperwork
Insurance documents form part of a strata scheme’s official records. These are often requested by owners, buyers, lenders, or auditors.
Common documents include:
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Certificates of currency
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Valuation reports
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Claims history
Having these organised makes life easier. Many schemes rely on standardised strata forms to keep records consistent and accessible.
Why Strata Management Matters
Insurance doesn’t sit on its own. It connects to maintenance planning, budgeting, compliance, and long-term decision-making. When those areas don’t align, issues tend to surface quickly.
Professional strata management helps ensure insurance reflects the building as it exists now—not how it looked years ago. Strata United supports owners' corporations across Sydney and Parramatta by managing insurance as part of a broader, structured approach. You can learn more about Strata United and how that support works in practice.
Thinking About Making a Change?
If insurance renewals feel rushed, unclear, or disconnected from your building’s actual needs, it may be worth reviewing how your scheme is managed.
A fresh approach often leads to clearer communication, more accurate coverage, and smoother claims handling. If you’re exploring alternatives, you can make the switch or contact Strata United to discuss strata insurance and management support that fits your property.