Residential strata insurance: the right protection for your scheme with enough cover to rebuild.

Beyond the building and its public liability, the scheme's policy can also carry:

• office bearers liability for committee members;
• fidelity cover for theft or misuse of scheme money;
• machinery and equipment breakdown;
• catastrophe cover, which applies only after a formal catastrophe declaration or state of emergency;
• loss of rent and temporary accommodation;
• the cost of a government audit of the scheme's records or tax; and
• legal defence costs.

Every residential strata wording we place has these in some form. Our guide to what residential strata insurance covers explains each one. Not all of them are automatic. Some must be selected, and they can carry their own limits, conditions or excesses.

Fidelity cover pays when someone inside the scheme steals or misuses its money. Some wordings also cover a payment-redirection scam, where someone posing as the strata manager gets a fake invoice paid. Where they do, it carries its own condition or limit. Others do not cover it at all.

Office bearers liability protects committee members when an owner or someone else claims against them over a committee decision. It generally applies to claims first made during the policy period. The wording sets the reporting deadline and any extension after the policy ends. Its limit is set on the schedule (the part of the policy that lists your scheme's own limits and options). One of the wordings we place makes this cover optional.

Flood cover can be requested, and most of the insurers we place with will consider it. On most wordings it is optional, and on some it cannot be bought at all.

The building should be insured for what it would cost to rebuild, which is a different number from what the units would sell for.

In a total loss, once the sum insured runs out, the owners fund the rest of the rebuild, commonly through a special levy. A partial loss is still limited by the sum insured and the other policy limits. On the residential strata wordings we place, a partial claim is not cut down because the building was underinsured. On other building policies, underinsurance can reduce a partial claim; the co-insurance clause explained shows how.

A low figure shrinks more than the main claim. Several extra benefits are set as a percentage of the building sum insured. On some wordings, catastrophe cover pays only if the sum insured was at least 80 per cent of the rebuild cost before the catastrophe.

Indexation does not fix a wrong starting figure. If the building was already short, adding a percentage each year carries the shortfall forward.

We commission a desktop building replacement estimate for you, free. It is for our purposes as your broker, to inform the advice we give you, and it does not replace an independent valuation where your state's law requires one.

What a scheme pays comes down to the building: its sum insured, location, construction, claims history and excess. Flood or cyclone exposure, plant such as lifts, and the size and use of the scheme move it too. A two-lot brick duplex is not comparable with a lift-serviced apartment building. The premium comes out of the owners' levies, so every owner feels a rise.

At renewal the committee can change the excess, which optional sections the scheme carries, and whether the building sum insured matches the rebuild cost. We show the committee where its premium comes from. Then we take the scheme to the insurers that suit the building and compare wording, excess and premium side by side.

In Queensland, it depends on the plan the scheme is on and whether the homes share a wall. So check which plan your scheme is on. Where the lots are parts of a building, the body corporate must insure the building. Where the lots are parcels of land, it must insure any building that shares a wall with a building on the next lot. Where those homes are detached, the body corporate usually has no duty to insure them, and in practice each owner insures their own.

Either way, a Queensland body corporate must insure the common property and hold public liability cover of at least $10 million, the required minimum. Other states set their own rules, so we check your plan before we answer.

A scheme can arrange cover itself, through a strata manager or through a broker. A strata manager may receive commission on the cover they arrange. That alone does not make the policy unsuitable. We can review the policy the strata manager arranged. We can then show the committee what it does and does not cover, and whether the price suits the scheme.

CIB charges a broker fee in addition to, or in place of, insurer commission. On some placements the insurer pays no commission: we charge a fee instead, disclosed in full, and no strata manager earns commission on those.

The ordinary excess sits on the schedule. Some events or optional sections carry a different excess, and some add a second one on top.

Each of the policies we place sets a value for building work above which cover changes. Most of them need the insurer's written consent before work starts, and on some, part of the cover stops above that value. If the committee is planning building work, tell us before it starts so we can check whether the insurer's written consent is needed.

Where a wording ties lift breakdown cover to a current comprehensive maintenance agreement, a lapsed or basic contract can decide a lift claim.

Common exclusions include wear and tear, gradual deterioration, the cost of fixing a building defect, vermin, pests, war and terrorism. Telling the insurer about a known defect can help the scheme get cover at a fair price. It does not make the defect, or damage from it, covered.

We currently arrange residential strata cover in Queensland, New South Wales, Victoria, South Australia and Western Australia. That includes self-managed duplexes and townhouse schemes as well as larger apartment buildings and new developments. If the scheme is commercial or mixed-use, see our commercial strata insurance page instead.

We start with the scheme: state and strata plan, self-managed or strata-managed, building sum insured, last valuation, claims, plant, major works and tenanted lots. We check for cover the scheme needs but has not selected, and whether the building sum insured is too low.

Which insurers we approach depends on the building, not a fixed order: the state, the building sum insured, the size of the scheme and how the lots are used. One of the wordings we place will not write a scheme insured for under $1.5 million. We then compare wording, excesses, optional sections and premium. We explain the trade-offs to the committee, even when the right cover costs more.

If the scheme claims on a policy we look after, a specialist claims manager on our team will take it up with the insurer. Your broker stays involved and keeps an eye on it. The claims manager works through everything the policy may respond to. That runs from the damage to the building to temporary accommodation and lost rent for the owners affected. The insurer decides the claim; we argue for everything the policy and the evidence support.