Strata insurance plays a central role in protecting a building and its owners. Committees are responsible for ensuring policies are accurate, compliant and renewed on time. Many committees find this process challenging, especially as legislation and risk environments change. NSW is currently undergoing major strata reform, with the fourth reform bill recently introduced to Parliament. These changes aim to strengthen accountability and improve governance standards across the sector. Insurance is one of the areas likely to feel the ripple effects of increased transparency and reporting.
This guide explains what committees should understand before their next renewal, with a focus on practical preparation rather than technical jargon.
Every scheme must maintain cover for building and common property, including structural elements, shared facilities and fixed plant. Policies must also include public liability for incidents that occur on common property. These minimum requirements ensure schemes can respond to major damage without placing owners under financial strain.
Committees do not need to become insurance experts, but they should be familiar with what is and is not included so they can ask the right questions during renewal.
Some protections are not included in standard strata policies. Office bearers liability helps safeguard committee members when decisions are challenged. Machinery breakdown can support repairs to essential equipment. Some schemes consider catastrophe cover for additional protection after large-scale events. These options help reduce risks that fall outside basic requirements.
A clear review before renewal helps avoid problems later. Committees should check past claims, confirm recent capital works and ensure valuations reflect current replacement costs. Missing or outdated information often leads to delays or incorrect cover, especially for older buildings or buildings undergoing upgrades.
Premium changes are influenced by a combination of building-specific and broader market factors. Claims history, building condition and risk exposure affect pricing. External pressures, including construction costs and severe weather events, play a role too. Understanding these factors helps committees assess whether an increase is expected or worth questioning.
Underinsurance is one of the most common issues that emerge during claims. Buildings that have not been revalued for several years may be insured for less than their true replacement cost. Committees should also update policies when upgrades are completed or new shared facilities are introduced. Smaller oversights have the potential to complicate or delay claims if insurers are not informed.
Preparation makes the biggest difference. Starting early gives committees time to review documents, compare quotes and discuss cover with owners. Updated records, valuations and meeting minutes support a smooth process and reduce uncertainty for everyone involved. Committees that face challenges with levy arrears or budgeting may find it helpful to review how arrears management supports financial planning.
NSW continues to review strata legislation, with the fourth reform bill recently introduced to Parliament. These reforms aim to strengthen transparency, modernise governance and improve decision-making across strata schemes. Although the most recent bill covers a wide range of issues, many changes relate to reporting, accountability and managing agents, all of which influence insurance administration. Committees that maintain strong documentation and clear communication will be better positioned to adapt as these reforms progress.
Progressive Strata assists committees by coordinating renewals, preparing documents and reviewing policy inclusions. Our team helps ensure that records are accurate and financial information is presented clearly so committees can make informed decisions. This support reduces risk and helps protect owners over the long term.
Strata insurance renewal does not need to be stressful. Early preparation, accurate documentation and clear communication help committees manage renewals with confidence. With ongoing reforms shaping the sector, strong governance and organised processes are more important than ever.
If your committee would like guidance during your next renewal, Progressive Strata is available to help.