Is strata insurance compulsory?

Yes in most schemes. Fair Trading says strata insurance is mandatory in NSW, Consumer Affairs Victoria sets minimum cover, and Queensland requires bodies corporate to insure common property and, in most cases, buildings. Small two-lot schemes may be exempt in some states.

Does strata insurance cover my belongings?

No. NSW says contents are not the owners corporation's responsibility. Your own contents policy, which may be a home and contents or a renters policy, is what covers them. NSW adds that even when damage comes from a common property problem, personal items such as furniture, appliances, curtains and carpets may not be covered. See do you need home insurance with a body corporate.

Who pays the excess on a strata claim?

It depends on the state and the facts. Queensland guidance puts the excess on the owner if only their lot is affected and on the body corporate if several lots or common property are affected, though the body corporate can decide otherwise. NSW pages do not say.

How often should the building be valued?

Fair Trading says every two to five years in NSW. Queensland requires an independent valuation at least every five years. A low valuation can leave the scheme underinsured, so the date of the last valuation is worth reading on the certificate.

What is strata insurance and what does it cover?

Strata insurance is the cover that an owners corporation, or a body corporate in Queensland, takes out for the building and the common property, with the cost shared by all owners through levies. In NSW it is mandatory and must include building insurance and public liability insurance of at least $20 million, plus work health and safety insurance if the scheme directly employs workers. It does not cover your belongings. Rules were checked in October 2026.

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

What strata insurance covers

NSW Fair Trading lists three types a scheme needs.

Building insurance. It covers replacing or reinstating the building to as-new condition, paying architects or other professionals needed for the repair, and removing debris.
Public liability insurance. It covers the owners corporation's responsibility for property damage or a person's injury or death.
Work health and safety insurance. It covers a worker injured on the job. A scheme does not need it if it employs no workers directly (contractors do not count) and is used only for residential purposes.

Insurers also sell optional extras. Fair Trading names shared contents cover, for things on common property such as washing machines, gardening gear or gym equipment, and temporary accommodation cover if a lot cannot be lived in after damage.

Strata insurance protects the building and common property. In NSW, personal items such as furniture, appliances, curtains and carpets may not be covered even when the damage comes from a common property problem.

Browse new townhouses

See the townhouse developments selling now, with bedrooms, prices and completion dates, city by city.

What it generally leaves out

The NSW Government says the contents of an owner's property are not the owners corporation's responsibility and recommends residents, whether owners or tenants, consider contents insurance.

Queensland spells out the building definition in more detail. Its building cover does not include temporary wall, floor and ceiling coverings, carpets, curtains, blinds, or fixtures a tenant can remove, and it excludes mobile or fixed air conditioning units for a particular lot and appliances that are not wired or plumbed in.

Event lists and definitions are set by state law and by each policy, so the scheme's certificate and policy wording are what count.

How premiums, valuations and excess work

Who pays. Insurance is paid from the administrative fund, which owners fund through levies shared by unit entitlement. In Queensland, building premiums under a building format plan follow the interest schedule lot entitlements, while under a standard format plan they follow the cost of reinstating the buildings on your lot.

Quotes. A NSW strata manager must provide at least three quotes, or explain in writing why that is not possible. Quotes must set out the base premium, commissions and broker fees, who gets them, and GST. A manager cannot take commission on insurance the owners corporation arranged without their help.

Valuations. NSW Fair Trading says a scheme should get a new building valuation every two to five years from a qualified valuer. Queensland requires an independent valuation at least every five years, and Consumer Affairs Victoria says a prescribed owners corporation must obtain one every five years.

Excess. NSW pages do not say who pays. Queensland guidance is that, if a claim affects only one lot, the owner should pay unless the body corporate decides that is unreasonable. If it affects two or more lots, or one lot and common property, the body corporate should pay unless it decides some should go to the affected lots. The excess must not create an unreasonable burden. In Victoria, an owners corporation can levy a lot owner separately for an excess or higher premium where the claim was caused by the owner's, a tenant's or a guest's culpable or wilful act or negligence.

Minimum cover by state

	NSW	Victoria	Queensland
Building cover	Mandatory, replacement or reinstatement	Reinstatement and replacement for buildings on common property	Full replacement value for buildings the body corporate must insure
Public liability minimum	$20 million	$20 million	$10 million per event and for the policy period
Smallest schemes	Two-lot schemes may skip building insurance if buildings are detached, nothing sits on common property and owners vote unanimously	Two-lot subdivisions are not required to insure common property	Not covered on the pages checked, so ask which regulation module applies to a two-lot scheme

Consumer Affairs Victoria says two-lot owners corporations risk legal and financial liability and should still insure. Its insurance page was last updated in May 2021, so recheck the Victorian figures.

Which townhouse buildings are covered

This is where townhouse schemes differ from apartments. In Queensland, the body corporate must insure buildings that share a wall with another building. Under a standard format plan, a free-standing townhouse building is the lot owner's to insure, though the body corporate can set up a voluntary insurance scheme that owners may join. Some townhouses are registered under a building format plan, where the body corporate insures each building that contains a lot.

NSW Fair Trading's insurance rules apply to the owners corporation of a strata scheme, so a townhouse scheme registered under the Strata Schemes Management Act must hold building insurance unless the two-lot exemption applies. In that case, Fair Trading says owners may choose individual building insurance instead. The NSW pages do not split buildings by lot type the way Queensland's do, so the policy wording and the section 184 certificate show what is actually covered. See townhouse insurance for owner-side cover.

How to find out what your scheme holds

A NSW section 184 certificate lists every policy held by the owners corporation, with the insurer, sum insured, due date and last premium paid. Fair Trading also says a strata report should show whether the scheme has good insurance and when it was last checked. The strata report guide explains how to get them. In Queensland the body corporate must give owners insurance and valuation details at each annual general meeting.

Common questions

Is strata insurance compulsory?: Yes in most schemes. Fair Trading says strata insurance is mandatory in NSW, Consumer Affairs Victoria sets minimum cover, and Queensland requires bodies corporate to insure common property and, in most cases, buildings. Small two-lot schemes may be exempt in some states.
Does strata insurance cover my belongings?: No. NSW says contents are not the owners corporation's responsibility. Your own contents policy, which may be a home and contents or a renters policy, is what covers them. NSW adds that even when damage comes from a common property problem, personal items such as furniture, appliances, curtains and carpets may not be covered. See do you need home insurance with a body corporate.
Who pays the excess on a strata claim?: It depends on the state and the facts. Queensland guidance puts the excess on the owner if only their lot is affected and on the body corporate if several lots or common property are affected, though the body corporate can decide otherwise. NSW pages do not say.
How often should the building be valued?: Fair Trading says every two to five years in NSW. Queensland requires an independent valuation at least every five years. A low valuation can leave the scheme underinsured, so the date of the last valuation is worth reading on the certificate.

Keep reading

Sources

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