Own an Apartment? Why 'Strata Insurance' Is Not Enough

Own an Apartment?

If you own a unit, apartment, or townhouse in Australia, you are likely paying thousands of dollars a year in "Strata Levies" (or Body Corporate fees).

A significant chunk of that money goes toward Residential Strata Insurance. Because of this, many owners mistakenly believe, "I don't need home insurance. The building is already covered."

This assumption is dangerous. If a pipe bursts in your kitchen or a fire guts your living room, you might discover that the Strata policy rebuilds the structural walls but leaves you with a concrete shell—no floorboards, no paint, and potentially no kitchen if you have renovated.

---

1. What Does Strata Insurance Actually Cover?

Strata insurance is essentially "Building Insurance" for the collective structure. It covers common property and the original structure of the building.

• Common Areas: Lifts, pools, car parks, lobbies, stairwells.
• The Structure: The external walls, the roof, the windows, and the plumbing inside the wall cavities.
• Liability: If someone slips and falls in the driveway or common foyer.

---

2. The "Paint and Carpets" Rule (The Gap)

Here is where it gets tricky. In many states (like NSW and QLD), the definition of "Building" often stops at the concrete slab and the bare walls.

❌ What Strata Often EXCLUDES (Your Responsibility)

• Floor Coverings: Carpets, floating floorboards (timber/laminate), and sometimes tiles if they are not part of the slab.
• Window Coverings: Curtains, blinds, and shutters.
• Internal Paint: The paint or wallpaper inside your unit is often considered your property, not the building's.
• Light Fittings: Chandeliers, downlights, and non-original fixtures.
• Renovations: If you (or a previous owner) upgraded the kitchen or bathroom, the Strata policy may only cover the value of the original standard fixtures, leaving you out of pocket for the difference.

Scenario: A flood destroys your apartment flooring. The Strata insurance will fix the concrete slab beneath. But you are responsible for paying for the new floating floorboards ($5,000+) and re-painting the water-damaged walls.

---

3. The "Inside Liability" Trap

Liability is another massive blind spot that can ruin you financially.

• If a guest slips on a wet tile in the shared hallway, Strata insurance pays.
• If a guest slips on a spilt drink inside your kitchen, Strata pays NOTHING. You are personally liable for their medical bills and legal costs.

Without your own insurance, a lawsuit from an injured guest could bankrupt you.

---

4. The Solution: Contents or Landlord Insurance

You need to fill this gap with a separate policy.

For Owner-Occupiers: "Contents Insurance"

You don't need "Building" insurance (that's the Strata's job), but you absolutely need a robust Contents Insurance policy. Ensure the policy defines "Contents" to include fixtures and fittings like carpets, blinds, and internal paint.

For Investors: "Landlord Insurance"

If you rent out the unit, you need a specialized Landlord Insurance policy. This covers:

• The carpets/curtains (Contents).
• Loss of rent (if the tenant defaults or the unit is unlivable after a fire).
• Malicious damage by tenants.
• Public liability inside the unit (crucial protection).

---

Read the PDS

Don't assume the Body Corporate has your back. Their job is to protect the building structure, not your living room style.

Ask your Strata Manager for a copy of the insurance policy summary today. Check exactly what is excluded. Then, buy a standalone Contents or Landlord policy to cover the rest. It is a small price to pay to avoid living in a bare concrete shell.

Disclaimer: This article is for general information purposes only. Strata legislation varies significantly by state (e.g., NSW vs VIC vs QLD) and by specific insurance policies. Always read the Product Disclosure Statement (PDS) and consult with your Strata Manager or an insurance professional to understand your specific coverage gaps.