Are You Doubling Up On Owners Corporation Insurance

This is an article repost.

Over the last few weeks, Strata Plan has received a number of calls from customers with questions about building insurance.

In particular, it has become apparent that some customers who own lots which are units or townhouses have organised their own building insurance, essentially doubling up on insurance costs.

Whether your property is one unit on a three-lot subdivision, one of a 10-townhouse development or one apartment within a 200-lot subdivision, if there is an Owners Corporation, your building insurance policy should be held in the Owners Corporation’s name.

This insurance policy will cover all individual lots in terms of building structure and building damage and as such lot owners should only be taking out contents (if occupying the lot) or landlords insurance (if leasing the lot) on their individual lots.
This is more than just best practice, it forms part of the Owners Corporation Act (VIC) 2006.

In other words, if your property is part of an Owners Corporation, then your Owners Corporation MUST insure your property. At a minimum, this insurance must cover your Owners Corporation for public liability, but would typically include coverage for damage to the building.

Any customers paying for their own individual building insurance will, therefore, be doubling up on costs.

Insurance costs should be budgeted for by your Owners Corporation and will form part of the levies you pay on a quarterly basis.

Of course, failure to adequately budget for insurance costs could leave your Owners Corporation short of required funds to insure your building.

When this happens, insurance may be premium funded or a special levy will need to be raised from all owners.

Strata insurance policies typically cover the building structure on behalf of all owners within any given Owners Corporation.

Generally speaking, most strata insurance policies cover material damage as a result of an insured peril, for example, flooding (ie: as a result of rivers overflowing etc), water damage (ie: as a result of a burst pipe), or an accident such as a car crashing into a building, to structural fixtures including fixed plants, machinery and underground services.

Some of these items include built-in ovens, stovetops, kitchen cupboards, hand basins, baths, and showers.

Of course, every insurance policy is different and insurers are offering different ranges of cover.

CHU, for instance, is now including coverage for floating floors as part of their standard coverage.

Strata policies also generally provide office bearers cover for those who hold positions on your Owners Corporation committee, as well as public liability cover for the common areas.

Of course, a strata insurance policy should also cover you and fellow owners for the entire replacement of the building – in line with your insurance valuations.
In short, your Owners Corporation’s insurance policy covers you and your fellow owners for a lot.

If your Owners Corporation is managed by Strata Plan, your building’s policy should be available on your building’s individual customer portal under “Documents”.

For more on what isn’t typically covered under Owners Corporation insurance, check out Strata Plan’s FAQ’s HERE.

Still, need help? Contact Strata Plan on 1300 278 728 or use the enquiry form below.

Need a copy of the Certificate of Currency for your building’s policy? Use our online order form HERE.


If you would like to contact us with any queries please complete the form below and we will respond to you within 2 business days.

(If you don’t know your Plan Number, click here. You can also find your Plan of Subdivision Number on your fee notice)

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