Do I need building insurance if I own a townhouse in a strata scheme?

Moneysmart says the body corporate may be responsible for insuring the building, so the first step is to ask the scheme what it holds. In NSW the legislation requires the owners corporation to hold building insurance, though a qualifying two-lot scheme can vote not to. Victoria's owners corporations must insure buildings on common property, with exceptions for small schemes. Other states have their own rules, and a conveyancer or the strata manager can confirm the position.

Does scheme insurance cover my furniture and belongings?

No. NSW says owners are responsible for their own personal property, such as contents, and that items like furniture, appliances, curtains and carpets may not be covered by the owners corporation. Contents cover is bought separately, and Moneysmart says a contents policy covers belongings such as furniture, clothes, computers and televisions against damage, loss or theft.

What happens if the building is underinsured?

Moneysmart says underinsurance means the insurance will not cover the full cost to rebuild, repair or replace what was lost. It lists causes such as picking a number that sounds right and not updating cover after renovations or rising rebuild costs. For a scheme policy, the valuation date and the sum insured are worth checking before purchase.

Is the insurance premium part of my levies?

In NSW, insurance is listed among the day-to-day expenses the scheme's administrative fund covers. In other states the levy notice or budget shows how the premium is built into the fees, and the owners corporation or body corporate can explain it.

Does a freehold townhouse need a different policy?

A freehold townhouse with no scheme has no scheme policy, so the owner arranges cover for the building and contents. Moneysmart says building insurance covers the building and fixtures and contents insurance covers belongings, and suggests comparing the price for the same cover, the excess, what is not covered, cover for injury to others and limits on items. The sum insured should reflect rebuild cost, not market value.

What insurance does a townhouse owner need?

Contents are the owner's own responsibility whatever the title, and the building is insured either by the scheme or by the owner, depending on how the townhouse is titled. Moneysmart says to check with the body corporate whether home insurance is needed, because the body corporate may be responsible for insuring the building. This guide sets out the New South Wales and Victorian rules and points to where to check in Queensland, as at October 2026. Other states and territories have their own laws.

Before buying, find out who holds the building policy, what sum insured it carries and when the building was last valued. The strata or owners corporation records usually show this.

Checked October 2026. Rules, rates and prices change, so confirm anything that matters with the source linked below.

Who insures the building

Title	What the rules say
Freehold townhouse with no owners corporation or body corporate	There is no scheme policy, so the owner arranges cover for the building. Moneysmart describes building insurance as covering the building itself and the fixtures.
New South Wales strata scheme	The owners corporation must hold building insurance that replaces or reinstates the building to as-new condition, including professional fees and debris removal, plus public liability cover of at least $20 million. NSW recommends a new valuation every 2 to 5 years.
Victorian owners corporation	Consumer Affairs Victoria says the owners corporation must hold reinstatement and replacement insurance for buildings on common property, plus public liability cover of at least $20 million for the common property. Where any lot is above or below another lot or common property, insurance is required for all lots, with exceptions such as single-storey lots. Ask for the certificate of currency.
Queensland body corporate	The Queensland Government says the body corporate must insure common property and some buildings, and that an owner whose lot is not covered by the body corporate's insurance needs to insure it. The Body Corporate and Community Management Act 1997 and the regulation module for the scheme set the detail. The seller provides an insurance certificate with the body corporate certificate.

Some small schemes can choose a different approach. In NSW, a two-lot scheme with physically detached buildings, and no part of a building on common property, can vote unanimously not to hold building insurance. In Victoria, Consumer Affairs Victoria says a two-lot subdivision does not have to take out the common property cover, and lot owners in an owners corporation without common property can decide unanimously to arrange their own insurance. Queensland and other states have their own arrangements for small schemes, so in any scheme each owner needs to confirm how their building is covered.

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New townhouses: the first months

A brand-new scheme has no insurance history, so ask the seller or conveyancer who holds the building policy, the date cover started, the sum insured and how it was worked out. The duties of a developer or original owner in the first months of a scheme are set by state law and differ by state, so the contract and the conveyancer are the places to check.

Contents and what the scheme does not cover

Moneysmart says contents insurance covers belongings such as furniture, clothes, computers, fridges and televisions, and that permanently attached items are generally not contents. NSW says individuals are responsible for their own personal property, and that even where damage is caused by a common property issue, items such as furniture, electrical appliances, curtains and carpets may not be covered by the owners corporation. Who covers fixtures and floor coverings in other states is worth checking in the scheme's policy wording.

Sum insured and underinsurance

Moneysmart says home insurance is about the cost to rebuild, not the market value, which includes the land, and that underinsurance means a claim may not cover the full cost to rebuild, repair or replace. It lists common causes: picking a number that sounds right, not updating after renovations, inflation and high demand for trades pushing up rebuild costs, and overlooking extras such as demolition, site clean-up, council fees and temporary housing. It points to the Insurance Council of Australia's calculators and says to review cover every year and after any renovations. For scheme policies, NSW says a new building valuation should be obtained every 2 to 5 years, and other states have their own requirements.

What to check in the records

A NSW strata information certificate shows levies and the scheme's capital works proposals. In Victoria and Queensland, ask for the owners corporation or body corporate certificate and the insurance documents, and check with Consumer Affairs Victoria or the Queensland Government what each contains. A buyer can also ask for the certificate of currency, the policy schedule and the date of the last valuation. The owners corporation certificate guide and the guide to what strata insurance covers go into more detail. For the question of whether home insurance is needed on top of the scheme policy, see home insurance with a body corporate.

If the townhouse will be rented out, see landlord insurance for a townhouse.

Common questions

Do I need building insurance if I own a townhouse in a strata scheme?: Moneysmart says the body corporate may be responsible for insuring the building, so the first step is to ask the scheme what it holds. In NSW the legislation requires the owners corporation to hold building insurance, though a qualifying two-lot scheme can vote not to. Victoria's owners corporations must insure buildings on common property, with exceptions for small schemes. Other states have their own rules, and a conveyancer or the strata manager can confirm the position.
Does scheme insurance cover my furniture and belongings?: No. NSW says owners are responsible for their own personal property, such as contents, and that items like furniture, appliances, curtains and carpets may not be covered by the owners corporation. Contents cover is bought separately, and Moneysmart says a contents policy covers belongings such as furniture, clothes, computers and televisions against damage, loss or theft.
What happens if the building is underinsured?: Moneysmart says underinsurance means the insurance will not cover the full cost to rebuild, repair or replace what was lost. It lists causes such as picking a number that sounds right and not updating cover after renovations or rising rebuild costs. For a scheme policy, the valuation date and the sum insured are worth checking before purchase.
Is the insurance premium part of my levies?: In NSW, insurance is listed among the day-to-day expenses the scheme's administrative fund covers. In other states the levy notice or budget shows how the premium is built into the fees, and the owners corporation or body corporate can explain it.
Does a freehold townhouse need a different policy?: A freehold townhouse with no scheme has no scheme policy, so the owner arranges cover for the building and contents. Moneysmart says building insurance covers the building and fixtures and contents insurance covers belongings, and suggests comparing the price for the same cover, the excess, what is not covered, cover for injury to others and limits on items. The sum insured should reflect rebuild cost, not market value.

Keep reading

Sources

This is general information, not financial, tax or legal advice. Get advice that suits your situation before you buy.