What is Building Insurance?

Strata Building Insurance protects the Owners Corporation against damage to the building caused by accidental or malicious acts. Common examples include:

• Fire or arson
• Vandalism
• Glass breakage
• Storm or tempest
• Vehicular impact
• Burst pipes
• Lightning strikes
• Burglary and theft
• Earthquakes

A common misunderstanding is that Strata Building Insurance also covers routine maintenance or building defects. Unfortunately, this is not the case. A useful comparison is motor vehicle insurance: you can insure your car against an accident, but not against everyday wear and tear. The same principle applies here.

How is an Owner Protected?

Every Owners Corporation has a legal duty to insure the building against accidental or malicious damage, as set out in section 83(1) of the Strata Schemes Management Act 1996.

Lot space is commonly defined as “the cubic air-space contained within the inner surface of the boundary walls, under surface of the ceiling and upper surface of the floor.” Under this definition, lot owners are responsible for the repair, replacement, and maintenance of building components inside their lot, such as:

• Internal walls
• Shower screens
• Internal doors
• Built-in wardrobes
• Toilets, baths, and basins
• Kitchen sinks, cabinets, and benchtops
• Appliances such as ovens, cooktops, range hoods, hot water systems, and exhaust fans

For example, replacing a leaking tap washer is the lot owner’s responsibility. However, if damage occurs due to an insurable event—such as a burst pipe flooding the bathroom—these items may be covered under the Strata Building Insurance.

Are Contents Covered?

No. Strata Building Insurance does not cover personal contents or fittings within a lot. Excluded items include:

• Carpets and underlay
• Light fittings
• Furnishings and personal contents
• Floating floorboards
• Wallpaper
• Curtains and blinds
• Paintwork on walls and ceilings
• Wall tiles on internal walls
• Non-fixed appliances such as clothes dryers, dishwashers, microwaves, and TVs

How Can Owners Protect Themselves?

To ensure full protection:

• Owner-occupiers can extend their contents insurance to cover items excluded from the strata policy.
• Investors may take out landlord insurance to protect fittings and other non-covered items.

Each insurer may vary in their approach, so always check the Product Disclosure Statement (PDS) and consult with your insurance provider or broker to ensure your lot is adequately covered.

This information is a guide only. Refer to your insurer’s PDS for specific policy details.