What Is Strata Insurance?

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If you own or live in an apartment, townhouse, or any multi-unit property, you’ve likely heard the term strata insurance. But what exactly is it, and why does it matter to us? As an insurance broker based in Sydney, servicing all of Australia, we’re here to break it down for you in a way that’s clear, practical, and relevant to your everyday life.

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So, What Does Strata Insurance Mean?

Strata insurance is a specialised type of cover designed for properties divided into multiple units, often called “strata title” properties. Think of it as a safety net for the shared spaces and structures in places like apartment blocks, duplexes, or townhouse complexes. It’s there to protect the building itself, along with common areas such as lobbies, stairwells, car parks, and even gardens or pools that everyone uses.

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Unlike regular home insurance, which covers your individual house, strata insurance focuses on the collective parts of a multi-unit property. It’s typically arranged by the owners’ corporation or body corporate, a group made up of unit owners like us, to ensure the whole property is safeguarded against unexpected events.

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What Does It Cover?

Strata insurance is all about protecting the bones of the building and the spaces we share. Here’s what it usually includes:

• The building structure: This means the walls, roof, floors, and even permanent fixtures like built-in air conditioning units or elevators.
• Common property: Things like shared driveways, fences, or recreational facilities such as gyms or BBQ areas.
• Liability protection: If someone gets injured in a common area, say, slipping on a wet staircase, this helps cover legal or compensation costs.
• Damage from events: Fires, storms, floods, or vandalism – strata insurance steps in to handle repairs or rebuilding.

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For example, imagine a burst pipe floods the lobby of your apartment block. Strata insurance would likely cover the cost of fixing the damage to that shared space, so we’re not all left scrambling to foot the bill.

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Why Is It Important in Australia?

In Australia, strata insurance isn’t just a nice-to-have, it’s often a legal must-do. Under laws like the Strata Schemes Management Act 2015 in New South Wales, owners’ corporations are required to take out this cover for their properties. It’s a practical way to manage the risks that come with multi-unit living, where one incident can affect dozens, if not hundreds, of residents.

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Plus, with more of us moving into apartments and townhouses – especially in cities like Sydney, Melbourne, or Brisbane – strata insurance is becoming a key part of property ownership. According to the Australian Bureau of Statistics, over 10% of Australians now live in strata-titled properties, and that number’s only growing.

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Do I Still Need My Own Insurance?

Here’s where it gets interesting. Strata insurance covers the building and shared areas, but it doesn’t protect what’s inside your unit – your furniture, electronics, or personal belongings. That’s where contents insurance comes in. If a fire damages your kitchen appliances or a thief nabs your TV, strata insurance won’t help, but your own contents policy will.

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Think of it like this: strata insurance looks after the “outside” and “in-between” bits, while contents insurance has your back for the “inside” stuff. Many of us pair the two for full peace of mind.

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A Real-World Example

Picture this: a storm rips through your suburb, tearing tiles off the roof of your apartment block and smashing a shared skylight. The owners’ corporation taps into the strata insurance to repair the roof and replace the skylight, keeping costs off your plate. But if the storm also floods your unit and ruins your couch, that’s where your contents insurance kicks in. It’s a team effort between the two policies.

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Final Thoughts

Strata insurance might sound complicated, but it’s really just a sensible way to protect the places we call home in a multi-unit setup. It’s about sharing the load with our neighbours, ensuring that if something goes wrong, we’re not left in the lurch. Curious about how it applies to your property? A quick chat with an insurance broker can clear up any questions and make sure you’re covered for what matters most.

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For more info on strata living and insurance obligations, check out resources like NSW Government’s Fair Trading.

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Disclaimer: The content provided in this blog is intended for general informational purposes only and should not be considered as professional advice. While we strive to provide accurate and up-to-date information, insurance is a complex field, and the applicability of the information can vary based on individual circumstances. Tank Insurance holds no responsibility for any actions taken based on the information provided in this blog.