What is Strata, Body Corporate & Community Association Insurance? 

Strata, Body Corporate & Community Association Insurance is compulsory for risks such as fire, storm and public liability if visitors or guests are injured on the property. Although the only compulsory covers are for public liability and fire/damage to the building, most committees chose to include most sections of cover, as it’s easier to budget for the annual premium rather than ask for money to cover urgent repairs.

Insurance companies have specialised packages for these types of risks, that include both compulsory cover and optional cover such as:

• Damage – to the building and common areas from accidental damage, fire, storms or theft.
• Catastrophe Cover – which increases your building sum insured to cover higher rebuilding costs if a catastrophe impacts your area.
• Loss of Rental Income – if you have tenants. 
• Alternative Rental Costs – if you are an owner occupier and have to move out while the building is repaired following a fire or other damage.
• Public Liability – covering injury to the public and visitors or damage to their property.
• Breakdown – of machinery and key electrical equipment.
• Office & Committee Members – covering actual or alleged breach of duties as a committee member, legal defence costs and court-awarded damages
• Voluntary Workers' Personal Accidents – covering residents injured when undertaking voluntary work around the property.

What does Strata Insurance cover?

Compulsory covers are:

• Damage – covers the building, common areas, swimming pool, car parks, walls and ceilings, lifts, spas, tennis courts and common contents against accidental loss or damage. However, it doesn’t cover the contents of the owner’s unit, apartment or townhouse. This is each owner's risk and we recommend having your own cover for personal liability and contents.
• Loss of Rental Income or Alternative Rental Costs – will reimburse the owner for loss of rental income if the property is tenanted. If you’re an owner occupier, the insurance will pay for temporary costs to move, place items in storage and rent an alternative apartment if your unit is too damaged to live in and is being repaired.
• Public Liability – covers the property for both legal defence costs and damages if a guest or visitor is injured and their property is damaged.

Optional covers include: 

• Machinery & Electrical Equipment Breakdown – covers the cost of repairing key plant, machinery, and electrical equipment (switchboards, air conditioning, lifts etc.) if damaged due to sudden internal failure. These items are essential for buildings and can be expensive to repair or replace.
• Office Bearers & Committee Members – protects the office bearers and members personally against alleged or actual acts of mismanagement of the property. Without this cover, members will have to personally pay their own legal costs and any damages.
• Voluntary Workers' Personal Accident – covers volunteers working around the property for accident benefits, as well as domestic assistance, weekly cash payments and travel costs to attend medical appointments.

How are Strata Insurance premiums calculated?

The key factors include: 

• location, including exposure to flooding, bushfires etc.     
• age and condition of the building
• whether the building contains asbestos
• replacement cost of the building, including car parks and facilities
• claims history - the number, type and total cost
• commercial activities carried out in the complex (if any) - what type, whether they are take-aways, supermarkets or professional offices
• the presence of swimming pools, spas or commercial car parks
• optional covers are to be insured.

Frequently Asked Questions

What is strata body corporate and community association insurance?

Strata, Body Corporate & Community Association Insurance are packages of insurance covers specifically designed for residential and commercial properties. They provide cover for fire, machinery breakage, public liability and other risks.

Who buys strata body corporate and community association insurance?  

This insurance is purchased by the committee for all the owners, with the premium cost divided between each owner. The committee also decides on the types of covers chosen from what is available in the package, the excesses per claim and the amount of insurance/ sum insured. The decision is usually based on advice and recommendations from a professional insurance adviser.

Is strata, body corporate and community association insurance compulsory in Australia? 

Yes, Strata, Body Corporate & Community Association Insurance is compulsory for risks such as fire, storm and public liability if visitors or guests are injured on the property.

What do strata, body corporate and community association mean? 

This is a general term, depending on your state or territory, that refers to a group of people that together own a building or property with a number of buildings, usually including car parking, swimming pools, gardens, lifts and common areas. These can be either residential strata or commercial properties, or a mixture of both. 

Why do we need strata, body corporate or community association insurance? 

Some amount of Strata, Body Corporate & Community Association Insurance is compulsory in all states and territories to ensure owners have cover for repairs for major damage to the building – for example, from fire or storm – or lawsuits from personal injury claims, where legal costs and damages can be substantial.