Strata Committees Face a New Era of Insurance Transparency in NSW

The reforms build on earlier NSW strata reform developments and reflect a broader policy push for transparency in strata management. Insurance has been a particular focus because premiums can be one of the largest annual expenses for apartment buildings, mixed-use schemes and larger residential communities. When commissions, fees or other benefits are not clearly understood, owners may struggle to assess whether a recommendation represents suitable value.

In practical terms, strata managers and committees should expect closer scrutiny of renewal files. That may include clearer records of alternative insurance quotes, explanations where multiple quotes were not reasonably obtainable, and fuller disclosure of any payments or benefits connected with placement. Owners should not assume that the cheapest premium is automatically the best outcome, but they should be able to understand why a particular insurer, excess structure or policy package has been recommended.

The timing is important. Many owners corporations are still dealing with high rebuilding values, higher excesses for water damage, stricter underwriting questions and climate-related pricing pressure. A transparent quote process gives committees a better basis for challenging assumptions, checking exclusions and confirming whether the building's sum insured remains realistic. It also helps reduce the risk of disputes later if a claim exposes a gap between what owners thought was covered and what the policy actually provides.

For strata committees, the immediate task is to strengthen renewal discipline. Minutes should show what information was considered, how conflicts or benefits were disclosed, and why the preferred option was accepted. Committees should also ask for policy comparisons in plain language, including premium movements, excess changes, sub-limits, exclusions and any new insurer conditions.

This is not a substitute for detailed advice, particularly for complex buildings with defects, commercial tenancies, short-stay exposure or a history of claims. However, the direction of travel is clear: owners corporations are expected to be more informed buyers of strata insurance. Better disclosure should help committees move beyond rubber-stamping renewals and towards more accountable, evidence-based decisions.