Does Strata Insurance Automatically Cover a Renovation Inside Your Unit?

Strata insurance generally covers a renovation inside a unit automatically, up to an allowance built into most policies for owners’ fixtures and improvements. A renovation that exceeds it can leave the extra value undeclared and effectively uninsured until the strata scheme’s sum insured is actually updated to reflect it. Ongoing construction work is worth disclosing as it happens too, not just once the final cost is known. If it isn’t clear whether a particular block of units is actually strata-titled in the first place, that’s worth confirming before any of this applies.

Does strata insurance actually cover a renovation automatically?

Generally yes, up to a point. Most strata policies build in an automatic allowance for owners’ fixtures and improvements. It commonly sits in the order of a couple hundred thousand dollars per lot, though the exact figure varies by insurer. This allowance exists so an ordinary kitchen refresh or bathroom update doesn’t require every owner to notify the scheme individually. It isn’t unlimited, which is exactly where a gap can open up.

Should a renovation be disclosed before it starts or only once it’s finished?

Before it starts, ideally. Ongoing construction changes what’s actually happening at a property while it’s underway. That’s worth disclosing to a strata manager or broker as a matter of course, since it’s a separate and earlier step than the sum insured question. Treating disclosure as something that only matters once the final cost is tallied up misses this earlier step entirely. The same principle applies on the commercial strata side of a scheme too, where an automatic allowance and a disclosure expectation both sit behind the policy.

What happens once a renovation is worth more than that allowance?

The amount above the automatic allowance may not actually be reflected in the building’s sum insured unless it’s specifically declared and added. A high-end kitchen or bathroom renovation or work involving real structural change can realistically exceed a standard allowance. The gap between what was actually spent and what the policy assumed is usually only discovered once a claim is being assessed.

Does an owner actually need to tell the body corporate about a renovation?

Generally yes. Doing it promptly is the safer default, particularly for anything likely to be above the scheme’s automatic allowance. Some schemes expect notification above a set value as standard practice. Treating a significant renovation as worth raising, rather than assuming it falls neatly under the automatic cover, is the better habit to build.

Whose responsibility is it to actually declare the renovation?

Practically, it falls to the individual owner, since they’re the one who actually knows what work was done and what it cost. The body corporate has no way to declare an improvement it was never told about, even though the resulting adjustment affects the scheme’s policy as a whole. This connects to the broader strata versus non-strata distinction too. Knowing which structure applies is the starting point for working out who’s actually responsible for declaring and insuring anything.

Key Takeaways

The information in this article is general in nature and does not constitute legal, financial or insurance advice. Please speak with a qualified adviser about your specific circumstances.