Is strata insurance compulsory?

In most states and territories, strata legislation requires the owners corporation to insure the building for its replacement value and to hold public liability cover. The rules, and the exemptions that apply to some small schemes, differ from state to state.

Does strata insurance cover flood?

Not automatically in the policy quoted here. Flood, meaning water escaping from a river, creek, lake, dam or similar, is excluded unless the owners corporation adds the optional flood cover, which is limited to the lesser of $10,000,000, the Section 1 limit or the flood sublimit on the schedule (SCI-PPW-04/2026, page 31).

Are carpets inside my unit covered by strata insurance?

No, in the policy quoted here. Carpets, rugs and floating floors inside a lot are lot owners’ contents (page 23). Floating floors can be added back as an optional cover (page 31).

Does strata insurance cover painting inside a unit?

It depends on the state. In the policy quoted here, internal paintwork and wallpaper in lots in New South Wales and the ACT are not covered unless the optional lot owners’ wall coverings cover is added, and that cover is limited to the room where the damage happened (pages 22 and 31).

Is there a cooling off period on strata insurance?

In the policy quoted here, yes: 21 days from the date a new policy is issued or a renewal starts, with a full refund of premium if no claim has been made, less any government taxes or duties (page 9).

What Does Strata Insurance Cover?

Strata insurance covers the building and the common property that an owners corporation (a body corporate in some states) is responsible for, along with its legal liability to other people. It does not cover what owners and tenants keep inside their own lots.

The policy is bought by the owners corporation, not by each owner, and the premium is paid from levies. The details differ from insurer to insurer, so this guide quotes one real policy throughout: the Strata Community Insurance Strata Insurance PDS and Policy Wording (SCI-PPW-04/2026), the wording behind the quotes on this site. Page numbers refer to that document. Another insurer's policy will read differently, and the wording offered with a quote is the one that counts.

What is strata insurance?

Strata insurance is one policy for a whole strata scheme. It insures the building for its rebuilding cost, the shared contents in common areas, and the owners corporation's liability if someone is hurt on common property. It goes by other names depending on the state: body corporate insurance in Queensland, owners corporation insurance in Victoria, and strata or community title insurance elsewhere.

It applies to any building on a strata plan, from a duplex or a few townhouses to an apartment block or a building with shops and offices. What it costs is a separate question, answered with real quotes in our guide to how much strata insurance is.

What does strata insurance cover?

A strata policy is a set of sections, each covering a different risk. Strata Community Insurance's policy has eleven, and the owners corporation selects the ones it takes (page 6).

Section	What it covers	Page
1. Insured property	Loss or damage to the building and common area contents, with extras such as professional fees, removal of debris, temporary accommodation and loss of rent	6, 25
2. Liability to others	The owners corporation's legal liability for death, injury or property damage	7
3. Voluntary workers	Set benefits for a volunteer injured doing work for the scheme, such as $300,000 for accidental death	7
4. Workers compensation	Liability to employees, only for buildings in Tasmania, the ACT, the Northern Territory or Western Australia	7
5. Fidelity guarantee	Fraudulent misappropriation of the scheme's funds	7
6. Office bearers' liability	Legal liability of office holders and committee members for a wrongful act, on a claims made basis	7
7. Machinery breakdown	Breakdown of electrical, electronic and mechanical plant	7
8. Catastrophe	The unforeseen rise in rebuilding cost after a declared catastrophe	7
9. Government audit costs and legal expenses	Professional fees for a tax audit, appeals against health and safety notices, and defending some litigation	8
10. Lot owners' fixtures and improvements	Fixtures an owner has added inside their lot, up to 10% of the sum insured	8
11. Loss of lot market value	The drop in a lot's value when the building cannot be rebuilt as it was and titles are terminated	8

The home page shows the main ones layer by layer.

What counts as the building?

More than the walls and roof. In this policy "building" follows the definition in each state's strata legislation and includes outbuildings, fences, gates, paths and roadways, retaining walls, awnings, tennis courts, in-ground swimming pools and spas, built-in plant and appliances, underground and overhead services, permanently attached electric vehicle chargers and solar panels (pages 21 to 22).

Floor coverings are part of the building, with two exceptions that surprise people: carpets and floating floors are not.

"floor coverings but excluding carpets (whether fixed or un-fixed) and Floating Floors"
Definition of Building, SCI-PPW-04/2026, page 21

Carpet in a common hallway is covered as common area contents. Carpet inside a lot is the owner's.

What does strata insurance not cover?

Every policy has exclusions. Some examples from this one (pages 7, 22 and 31 to 32):

Owners' and tenants' belongings. Lot owners' contents and tenants' property are outside the policy.
Flood, unless the owners corporation adds the optional flood cover. Flood here means water escaping from a river, creek, lake, dam or similar. Storm and rainwater are treated separately.
Gradual causes, such as wear and tear, rust, corrosion, mould, wet or dry rot, and lack of maintenance.
Known defects that have not been fixed, and the cost of rectifying faulty workmanship, materials or design.
Tree roots invading pipes, and the cost of clearing drains they block.
The sea, high water and tidal waves, other than a tsunami.
Work done without approval. Alterations by an owner or tenant that the owners corporation has not approved in writing are not part of the insured property.

Does strata insurance cover water damage?

Often yes when it is sudden, and no when it is gradual. In this policy, when the insured property is damaged by the bursting, leaking or overflowing of water tanks, apparatus or pipes, the insurer also pays to find the leak:

"We will pay the reasonable costs of locating the cause of the Loss or Damage and for any Loss or Damage caused in locating the leak."
Section 1, Part A, benefit 9, SCI-PPW-04/2026, page 27

The failed part itself is covered only up to $1,000. None of this applies if the leak came from a defect or faulty workmanship the owners corporation knew about or could reasonably be expected to know about, from rust, corrosion or gradual deterioration it should have been aware of, or from tree roots (page 27). Mould, seepage and dampness are excluded as gradual causes (pages 31 to 32).

Whether a leak inside one lot is a strata claim also depends on where the pipe sits and who is responsible for it under your state's legislation and the scheme's by-laws.

Does strata insurance cover my contents?

No. In this policy, lot owners' contents are defined as freestanding appliances, electronics, furniture, furnishings, personal effects, and the carpets, rugs and floating floors inside the lot (page 23), and they are listed among the things the building cover does not include (page 22).

That is why owners who live in their unit commonly hold a separate contents policy, and investors commonly hold landlord insurance. Quick Strata is a Gary brand, and Gary quotes contents insurance and landlord insurance online.

Two optional covers narrow the gap. One covers lot owners' floating floors. The other, for New South Wales and the ACT, covers repainting or re-wallpapering inside a lot, limited to the room where the damage happened (page 31).

What do lot owners get from the strata policy?

The policy belongs to the owners corporation, but some benefits are paid for individual lots after insured damage. In this policy (pages 6 to 8):

temporary accommodation for a lot the owner lives in, or loss of rent for a lot that is leased
up to $2,500 a lot for emergency accommodation
up to $2,000 a lot towards levies and fees while the lot cannot be occupied
up to $1,000 a lot for boarding pets
fixtures and improvements an owner has added, up to 10% of the sum insured across the scheme

Who pays the excess on a strata claim?

The insurer applies one excess to each claim arising from one event, and the amount is set out on the policy schedule (page 9). Which person ends up paying it, the owners corporation or the owner of the lot involved, is not decided by the policy. It depends on the strata legislation in your state and the scheme's own by-laws. Queensland sets a default in its regulation, covered in our guide to body corporate insurance in Queensland, and Victoria lets the owners corporation recover it in set cases, covered in our guide to owners corporation insurance in Victoria.

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This guide is general information only. It summarises one insurer's policy (edition 04/2026) and leaves out terms, conditions and limits that may matter to your scheme. The Product Disclosure Statement is the full statement of the cover.