Strata insurance is one of the most important responsibilities of a body corporate, yet it’s also one of the most misunderstood. In Brisbane and across Queensland, many strata schemes unknowingly expose themselves to significant financial risk due to common insurance mistakes.

Below are the most frequent strata insurance mistakes Brisbane body corporates make, and how to avoid them.

1. Underinsuring the Building Due to Outdated Valuations

One of the most common (and costly) mistakes is underinsuring the building.

In Queensland, body corporates are required to insure their building for full replacement value. However, many strata schemes rely on valuations that are years old and no longer reflect current rebuilding costs.

Why this is a problem in Brisbane

• Construction costs have increased significantly
• Labour and material shortages affect rebuild pricing
• Older valuations may not include demolition, debris removal, or professional fees

Tip: Brisbane strata buildings should generally obtain an updated insurance valuation every 3–5 years, or sooner after major works.

2. Assuming Flood Is Automatically Covered

Many Brisbane body corporates assume flood insurance is automatically included in their strata policy. This is not always the case.

Flood cover can:

• Be excluded entirely
• Be limited by sub-limits
• Have higher excesses

Given Brisbane’s exposure to flooding and severe weather, misunderstanding flood cover can leave a strata scheme dangerously exposed.

Tip: Always confirm:

• Whether flood is included
• How flood is defined in the policy
• Any limits or exclusions that apply

3. Not Understanding Excess Structures

Another common mistake is failing to understand how excesses apply to strata claims.

In Brisbane, excesses for events such as water damage, storm damage, or flood can be significantly higher than standard claim excesses. Some policies also apply separate excesses per claim type.

Common misunderstandings include:

• Assuming the excess is the same for all claims
• Not knowing who pays the excess (owner vs body corporate)
• Being unaware of higher excesses for weather-related events

Tip: Body corporates should review excess schedules annually and ensure committee members understand how they apply in real claims.

4. Believing Lot Owner Contents Are Covered

Strata insurance covers common property and building structures, not personal contents inside individual lots.

A frequent issue arises when:

• Lot owners assume fixtures, fittings, or improvements are covered
• Disputes occur after a claim about what is body corporate responsibility

Tip: Clarify the boundary between strata insurance and individual contents insurance, and communicate this clearly to owners.

5. Choosing Price Over Policy Coverage

It’s tempting for body corporates to focus solely on premium cost at renewal. However, the cheapest policy often comes with:

• Reduced coverage
• Higher excesses
• More exclusions
• Limited claims support

In Brisbane, where weather-related claims are common, policy wording matters far more than minor premium savings.

Tip: Compare coverage, exclusions, and claims support, not just price.

6. Not Reviewing the Policy Each Year

Strata insurance needs change over time as buildings age, regulations evolve, and risk profiles shift.

Failing to review policies annually can result in:

• Inadequate sums insured
• Outdated cover
• Missing optional protections relevant to Brisbane conditions

Tip: Each renewal should involve a proper review, not an automatic rollover.

How Brisbane Body Corporates Can Avoid These Mistakes

Avoiding these common mistakes starts with:

• Understanding Queensland strata insurance requirements
• Keeping valuations up to date
• Reviewing policy wording carefully
• Seeking professional advice when comparing insurers

A specialist strata insurance broker can help body corporates navigate policy differences, explain complex clauses, and support claims, particularly important in Brisbane’s risk environment.

Final Thought

Most strata insurance problems only become visible after a claim is lodged, when it’s too late to fix them. By addressing these common mistakes early, Brisbane body corporates can protect their buildings, finances, and owners with greater confidence.