Living in a strata property means sharing more than just walls with your neighbors—you’re sharing insurance responsibilities too. Common property insurance in Australia covers shared areas and structural elements in apartment buildings, townhouse complexes, and similar multi-unit developments. This includes lobbies, hallways, elevators, roofs, external walls, gardens, and swimming pools. The body corporate arranges this coverage through levies paid by all owners. Understanding what’s covered versus what you need to insure separately prevents expensive surprises when damage occurs. Recent data shows many Australian unit owners remain confused about coverage gaps, leading to out-of-pocket costs that could reach thousands during repair situations.
What Common Property Actually Includes
The definition varies slightly between states, but generally common property means everything not inside your unit’s boundaries. In New South Wales, this is defined under the Strata Schemes Management Act 2015. Queensland uses the Body Corporate and Community Management Act 1997. Despite different legislation, the concept stays pretty consistent.
Think of it this way: if you can’t take it with you when you move, it’s probably common property. The concrete slab your apartment sits on, the building’s foundation, external windows (in most cases), the front door from the outside, balconies, and shared utility infrastructure all fall under common property.
I’ve seen arguments between owners and body corporates about balconies specifically. In most jurisdictions, the balcony structure and waterproofing membrane are common property, but anything you’ve installed on top—like tiles or decking—might be your responsibility. It gets messy.
How Body Corporate Insurance Works
The owners corporation (called body corporate in Queensland and Tasmania, strata company in NSW and Victoria) must arrange building insurance for common property. This is a legal requirement under strata legislation across all Australian states and territories. The premium gets divided among owners through quarterly or annual levies based on unit entitlements.
These policies typically cover the building’s replacement value, not market value. That’s an important distinction. Replacement value means the cost to rebuild the structure to current building standards, which can actually exceed the property’s sale price in older buildings that need extensive upgrades to meet modern codes.
Most policies include public liability coverage—usually around $10-20 million. This protects against claims if someone gets injured on common property. If a visitor trips on a broken tile in the lobby and sues, that’s covered. Office bearers’ liability protection is often bundled in too, protecting committee members from personal liability for decisions made in good faith.
Coverage Gaps That Catch People Off Guard
Here’s where it gets tricky. Common property insurance doesn’t cover your personal belongings or internal fixtures even if damage originates from common property. Say a pipe in the ceiling (common property) bursts and floods your apartment. The body corporate’s insurance covers repairing the pipe and ceiling. Your contents insurance covers replacing your destroyed furniture and electronics.
But what about the carpet you installed? The custom kitchen you renovated? These items sit in a gray area that depends on your building’s bylaws and strata plan. Some buildings define internal improvements as owner responsibility; others include them in common property if they’re permanent fixtures.
Water damage is a huge source of disputes. I know someone whose bathroom flooded from a broken pipe that ran through three units. Figuring out which insurance paid what took months of arguing. The pipe was common property, but the water damage to finished surfaces inside units became an owner issue.
Individual Unit Owner Responsibilities
You need separate contents and liability insurance for your unit. This isn’t optional if you want financial protection. Contents insurance covers your furniture, appliances, clothing, and personal items. Building insurance for your unit—if strata requires it—covers internal walls, flooring, light fixtures, and other elements within your boundary.
Check your strata plan documents to understand exactly where common property ends and your property begins. This boundary isn’t always obvious. In some older buildings, internal walls are common property because they’re structural. In others, everything inside the unit boundary is yours.
Betterment is another headache. If common property damage affects your unit and you’ve upgraded beyond standard finishes, insurance might only cover replacing to original specifications. You renovated with marble countertops, but the building originally had laminate? You’re paying the difference out of pocket.
Special Levies and Insurance Claims
When damage exceeds the policy excess, the body corporate makes a claim. But that excess can be substantial—I’ve seen policies with $10,000 to $25,000 excesses for different claim types. If repair costs fall below the excess, owners share the cost through a special levy.
Special levies require a general meeting vote in most cases. The body corporate can’t just bill you without proper procedures. However, if your unit caused the damage through negligence—you left a tap running and flooded common property—you might be personally liable for costs even if insurance covers some of it.
Claims affect future premiums. Multiple claims in a short period can make insurance prohibitively expensive or cause insurers to refuse coverage altogether. I’ve heard of buildings becoming practically uninsurable after major weather events or recurring problems.
Reviewing Your Building’s Coverage
Request the insurance certificate from your strata manager annually. Check the sum insured matches realistic rebuilding costs—underinsurance is common and means claims only pay out proportionally. If the building is insured for $5 million but would cost $7 million to rebuild, you only get 71% of any claim.
Look at exclusions carefully. Flood and water damage exclusions vary significantly. Some policies exclude gradual water damage from slow leaks but cover sudden burst pipes. Earthquake coverage is often optional and adds significant premium costs.
Ask about the claims history at the annual general meeting. Buildings with frequent claims face higher premiums or coverage restrictions. This affects your levy costs and can even impact property values if insurance becomes difficult to obtain.
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