Strata Insurance - Committee Decision, Personal Consequences
When You’re on a Strata Committee…
Most people don’t join a strata committee expecting to make decisions about insurance.
Yet quietly, year after year, one of the most significant responsibilities a committee carries is approving cover that protects:
People’s homes
Significant financial assets
The legal position of the Owners Corporation
If that feels uncomfortable at times, that’s not a weakness. That’s awareness.
And awareness is where good governance starts.
The Reality NSW Committees Need to Understand
In New South Wales, strata insurance isn’t optional or informal.
Under the Strata Schemes Management Act 2015 (NSW), the Owners Corporation is required to hold:
Building insurance for full replacement value
Public liability insurance of at least $10 million
Cover that extends to common property, shared services and fixtures
This isn’t about best practice.
It’s a legal obligation.
Which means approving insurance isn’t just a financial decision — it’s a compliance decision.
Why “We’ve Always Had This Policy” Isn’t a Strategy
Many committees inherit an insurance policy that’s been in place for years.
It feels safe. Familiar. Untested.
But here’s the uncomfortable truth:
Construction and rebuild costs change every year
Insurance markets harden and soften
Policy wordings evolve
Claims history reshapes insurer appetite
That’s why NSW best practice — and insurer expectation — is a building valuation every three years.
Without it, buildings can quietly drift into underinsurance, exposing owners to special levies after a major loss.
Comfort does not equal protection.
The Strata Insurance Market Is Smaller Than You Think
There are only a limited number of insurers willing to underwrite residential strata in NSW.
Every broker approaches the same insurers.
Insurers will only engage seriously with one broker per building at a time.
This is why a broker must be formally appointed — not to restrict choice, but to:
Properly canvas the market
Negotiate using expiring terms and current market conditions
Present genuine alternatives
Explain differences in cover, not just price
Quoting is not the value.
Advice is.
Three Questions Every NSW Strata Committee Should Be Able to Answer
Before approving a renewal, a committee should confidently say:
1. Are we insured for full replacement cost — today?
Not market value.
Not last decade’s estimate.
A valuation that reflects current NSW rebuild costs.
2. Has this policy been reviewed, or just rolled over?
A proper review tests the market, compares wordings, and explains what’s changed — not just what’s cheaper.
3. Do we understand what isn’t covered?
Insurance never covers everything.
Confidence comes from knowing which risks the scheme is retaining — and that this was a conscious decision.
If the answer to any of these is “not sure”, that’s your signal.
Confidence AND Certainty
Strata committee members don’t need to be insurance experts.
What they do need is:
Clarity
Transparency
Confidence they’ve asked the right questions
The biggest risk isn’t asking for help.
It’s assuming everything is fine because nothing has gone wrong yet.
If you’re on the Committee and you
Feel uneasy approving the insurance renewal
Can’t clearly explain the cover to owners
Aren’t confident the building is fully insured under NSW requirements
👉 That’s the right time to talk to an expert.
We help strata committees cut through complexity, understand their obligations, and feel confident they’ve done the right thing — for the building and the people who live in it.
Risk doesn’t need drama.
It needs clarity.