Owners corporation insurance in Victoria: what the Act requires

In Victoria an owners corporation must hold reinstatement and replacement insurance for buildings on common property and public liability insurance of at least $20 million. In a multi-level building it must insure every lot as well. Two-lot subdivisions are exempt.

Victoria calls the body an owners corporation (the older term is body corporate) and the policy owners corporation insurance, though strata insurance means the same thing. The rules are in Part 3, Division 6 of the Owners Corporations Act 2006, and this guide quotes them.

What insurance must an owners corporation have in Victoria?

"An owners corporation must take out reinstatement and replacement insurance for all buildings on the common property"

Owners Corporations Act 2006 (Vic), section 59(1)

The standard is the cost "to replace, repair or rebuild the property to a condition substantially the same, but not better or more extensive than its condition when new", plus removal of debris and architects' fees (section 59(2)).

It must also hold public liability insurance for injury, death, illness and property damage connected with the common property, where "the limit of liability is a minimum of $20 000 000 ... in any one claim and in the aggregate during any one period of insurance" (section 60).

Does the owners corporation insure my apartment or just the common property?

In an apartment building, both. Section 61 is the rule that makes Victorian apartment insurance work:

"If a building on a plan of subdivision is located above or below common property, a reserve or a lot, the owners corporation must take out"

Owners Corporations Act 2006 (Vic), section 61(1), which goes on to require reinstatement and public liability insurance "in respect of all lots in the plan"

So where lots are stacked, the owners corporation insures the whole building. Where homes sit side by side on the ground, such as villa units or townhouses, the default duty covers only buildings on common property, and how the homes themselves are insured depends on the plan and on what the owners have resolved:

Our duplex guide covers the two-lot case, and our guide to townhouse and unit block insurance covers low-rise sites.

What is not part of the building in Victoria?

The Act's definition of building includes improvements, fixtures and shared services, but not "carpet and temporary floor, wall and ceiling coverings" or "fixtures removable by a lessee at the end of a lease" (section 54). Those, and an owner's or tenant's belongings, need a contents or landlord policy.

How often must an owners corporation get a valuation?

Every five years, or sooner if the owners corporation decides, for every owners corporation except the smallest tier.

"An owners corporation must obtain a valuation of all buildings that it is liable to insure."

Owners Corporations Act 2006 (Vic), section 65(1)

The valuer's report goes to the next general meeting. Older guidance says only "prescribed" owners corporations need a valuation. That category was replaced by tiers on 1 December 2021, and the duty now applies to tiers one to four.

Who pays the excess on an owners corporation claim?

The owners corporation holds the policy, so the excess falls to it first. The Act then lets it recover the excess from a lot owner in set cases. Under section 23A(3) it "may levy a lot owner a fee to cover":

• an excess or an increased premium, where the claim was caused by "a culpable or wilful act or the gross negligence" of the owner, their tenant or a guest
• damage to common property caused by an owner or tenant, where it is uninsured or costs less than the excess
• "an excess amount on an insurance claim if the claim solely relates to a lot owner's lot"

The word is "may". It is the owners corporation's decision, where Queensland makes the owner liable by default.

Must a manager disclose insurance commission in Victoria?

Yes. Before an insurance contract is entered into, a manager who will receive a commission, payment or other benefit must disclose it in writing to the chairperson (section 122B). For insurance, where the commission is a percentage of the premium, the manager discloses the percentage, and must disclose again if it rises at renewal. The manager's annual report must also state the commissions received during the year.

A percentage is harder to picture than a dollar figure, so committees commonly ask for both. Committee members wondering about their own exposure can read our guide to office bearers liability insurance, and buildings with shops at street level our guide to commercial strata insurance. Our explainer on commissions in strata insurance lists the questions to ask.

What if insurance cannot be obtained on reasonable terms?

The Victorian Civil and Administrative Tribunal can exempt an owners corporation from a requirement to hold insurance "where an appropriate insurance policy cannot be obtained on reasonable terms" (section 170).

Sources

• Owners Corporations Act 2006 (Vic), sections 7, 7A, 23A, 54 to 65, 122B, 170: legislation.vic.gov.au
• Consumer Affairs Victoria, tiers of owners corporations: consumer.vic.gov.au
• Consumer Affairs Victoria, insurance for owners corporations: consumer.vic.gov.au

General information only, not legal advice. Read from the Act as in force in September 2026.