Strata insurance in NSW: what the law requires in 2026

In New South Wales an owners corporation must insure the building for its full rebuilding cost and hold public liability cover of at least $20 million. Since February 2025 a strata managing agent must also give the owners corporation at least three insurance quotes, each showing the commission and broker fee.

NSW rewrote its rules on how strata insurance is sold in 2024 and 2025. This guide sets out what the Strata Schemes Management Act 2015 and its Regulation require, and what the charges on a NSW strata premium look like.

What insurance must a strata scheme have in NSW?

"The owners corporation for a strata scheme for the whole of a building must insure the building and keep the building insured under a contract of insurance"

Strata Schemes Management Act 2015 (NSW), section 160(1)

The policy has to pay for rebuilding so that every part is "not worse or less extensive than that part when new", plus removal of debris and architects' fees (section 161). The sum insured must allow for cost increases over the 24 months after the policy starts.

The owners corporation must also hold:

• Public liability for property damage, death or injury. The Act says $10 million and the Regulation lifts it: "the minimum insurance cover ... is $20,000,000" (Regulation, clause 40).
• Voluntary workers cover, for people who work on the building or common property without pay.
• Workers compensation, where the law requires it. The NSW Government says it is not needed where a wholly residential scheme employs nobody directly.

Office bearers liability and fidelity guarantee insurance are optional in NSW (section 165). Our guide to office bearers liability insurance explains what that cover does.

What counts as the building in NSW?

The building includes owners' improvements and fixtures that form part of it (section 161(3)). The insurance does not have to cover "fixtures removable by a tenant", or "paint, wallpaper and temporary wall, floor and ceiling coverings" (section 161(4)).

That is why paint and wallpaper inside a NSW lot are treated differently by insurers. In the policy that prices quotes on this site, internal paintwork and wallpaper in NSW lots are covered only if an optional cover is added. Our guide to what strata insurance covers has the wording.

What must a strata manager disclose about insurance in NSW?

A good deal, under changes that began on 3 February 2025:

• A managing agent must provide "not less than 3 quotations from different providers for each type of insurance", or give written reasons why not (section 166(1)).
• Each quote must itemise the base premium, the commission and the broker fee as an amount and as a percentage, stamp duty, levies, underwriting agency fees and GST, and name who the commission and broker fee will ultimately be paid to (section 166(2)).
• "Commission" includes an insurance broker fee.
• A commission is allowed only if it is in the agency agreement or approved by a resolution at a general meeting, and it must be reported at the annual general meeting.
• An agent cannot take a commission where the owners corporation found the quote and arranged the policy itself, without the agent's help.

There is no general ban on commissions and no cap. A March 2026 review for the NSW Government set out options that include one, and the Minister said the Government "will now carefully consider" the findings. Our news explainer on strata insurance commissions follows the story.

Do small strata schemes need insurance in NSW?

Yes, with one narrow exception for building insurance. A two-lot scheme can decide by unanimous resolution not to hold it, but only where the buildings are "physically detached" and no building or part of one sits outside the two lots (section 160(4)). The exception covers building insurance only. It does not remove the duty to hold public liability cover.

A duplex with a shared wall does not qualify. Our duplex guide has examples and prices.

How often does a NSW strata building need a valuation?

It is recommended, not compulsory. The NSW Government's guidance is: "You should get a new building valuation every 2 to 5 years by contracting a qualified valuer." Queensland and Victoria, by contrast, make a five-yearly valuation a legal duty, while Western Australia and South Australia set no interval at all.

Who pays the excess on a strata claim in NSW?

The Act does not say. It is left to the owners corporation and its by-laws. One related rule: an insurer cannot recover its payout from an owner who caused the damage unless the owner's act was wilful (section 170).

What is the emergency services levy on a NSW strata premium?

NSW funds its fire and emergency services partly through a levy on property insurance, collected from insurers and passed on in premiums. On a Sydney duplex we priced in November 2026, the levy was $280.28 of a $3,258.28 total, and with GST and stamp duty the government charges came to about a quarter of the bill.

In February 2026 the Treasurer said the Government "is committed to removing this Emergency Services Levy (ESL) and replacing it with a simple and transparent levy spread across all properties". As of November 2026 it is still charged. Our guide to how much strata insurance is shows it on a real quote.

Sources

• Strata Schemes Management Act 2015 (NSW), sections 4, 57, 60, 160 to 172: legislation.nsw.gov.au
• Strata Schemes Management Regulation 2016 (NSW), clauses 39 and 40: legislation.nsw.gov.au
• NSW Government, Managing strata finances and insurance: nsw.gov.au
• NSW Government, guide to strata law changes: nsw.gov.au
• Revenue NSW, Emergency services levy: revenue.nsw.gov.au
• NSW Government, "Next steps for Emergency Services Levy reform", 15 February 2026: nsw.gov.au

General information only, not legal advice. Section wording was read from the Act and Regulation as published in December 2025, and later changes from NSW Government pages updated in October 2026.