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What does strata title insurance cover? Your apartment insurance guide

Insurance for an apartment in a strata scheme can be a little different to that of a house or other property with a Torrens, or ‘freehold’ title. The strata scheme was actually created in Australia in 1961 to suit property with multiple units and multiple owners, who together maintain and manage common property such as corridors, gardens, garages and the exterior building itself.

When you own an apartment, you’ll most likely own everything inside of the walls yourself – but the external walls and roof will generally have shared ownership. So how do you approach insurance cover for an apartment, and how is this different to an average house?

Most residential property owners will consider building insurance to cover their physical building, as well as contents insurance to cover personal belongings. But in a strata scheme, residential strata insurance can work a little differently. Residential strata insurance covers common property in the case an insured incident or accidental damage occurs.

The requirements for strata insurance differ state to state, as each state and territory in Australia is covered by different strata laws. It is worth noting that some states refer to strata insurance as body corporate, owners corporations, residential strata or common property insurance.

Do I need property insurance if my property is managed by strata? 

While your insurance requirements will depend entirely on your unique circumstances and financial situation, property insurance for an apartment is typically covered by mandatory strata insurance which you would pay for through your regular strata fees/ levies.

What does strata insurance cover? Your strata insurance should cover shared property such as the building’s exterior, shared facilities, car park and public liability for the property. Normally, strata insurance is overseen by a building's property manager or strata managers. It's likely that your building is already insured, but it’s worth checking your strata policy documentation or with strata management to be sure. 

What strata insurance do I need? Are there any other insurance types to consider for my apartment or strata property? 

There are several types you might think about, depending on your needs and financial situation. These insurances may include:
  • Contents insurance may be a good idea to cover your personal belongings such as computers, TVs, furniture and light fittings – generally any permanent structures or items that are not fully installed.
  • Landlord insurance may be a good idea if you’re renting your apartment out to tenants. And, 
  • Title insurance may provide peace of mind about a range of different property ownership risks.
A First Title strata title insurance policy could provide cover for insured incidents such as:
  • Unapproved alterations by a previous owner that you weren’t previously aware of
  • Undisclosed planning and zoning issues that stop you from using your apartment
  • Undisclosed special levies for your strata unit incurred by a previous owner
  • Errors on property searches and enquiries by your conveyancing practitioner
  • Adjustment of taxes and various land charges, and  
  • Fraud relating to your property. 

Strata title insurance case study

Recently, our team paid out a $1,951 claim to a client who had an investment strata property in NSW.

Following settlement, the client had received a council notice stating that the strata manager had failed to pay water rates and that the next step would be legal action against the owners corporation.

The strata manager failed to respond to council letters and did not pay the council the outstanding amount, so our client submitted a claim with their First Title policy.

We reviewed the conveyancing file and it became clear that the arrears for all units had been overlooked and not accounted for in the adjustments. Council advised that to avoid legal action, the client should install their own water meter and pay the arrears water rates for their unit. Following the successful claim, we covered the cost of the arrears and the installation cost of an individual water meter for the client with a total $1,951 value.

Strata title insurance takes just one easy payment for the entire time you own your apartment, protecting you from potential financial loss associated with defects in your title to your property.

Learn more about strata title insurance.

Get a quick quote or request cover.