Does strata insurance cover internal damage caused by external leaks?
In this month’s Strata Q&A, we received a question from Jennifer H, an owner based in NSW, regarding whether internal damage that occurs as a result of external leaks (i.e. a broken roof tile or damaged flashing) is covered by strata insurance.
Q. Does strata insurance cover internal damage caused by external leaks?
Does strata insurance cover internal damage caused by external leaks? For example, if water seeps through the ceiling due to a cracked roof tile and causes the ceiling paint to peel and stains the carpet below, will our strata insurance cover the repairs to roof as well as the ceiling and carpet?
A. Strata insurance in NSW generally covers damage to the building, but it does not cover items such as carpets, curtains, or blinds.
Strata insurance in NSW generally covers any damage to the building and common property that is not specifically excluded in the policy, which would extend to internal damage caused by external leaks. As to whether strata insurance would cover the items listed in the example above, it may be helpful to break down each item separately.
Repairs to the roof (damaged tile)
The roof and external walls are considered common property, which means the owners corporation is responsible for fixing any defects, such as cracked roof tiles or faulty flashings. Strata insurance will generally cover repairs if the damage is sudden and accidental, such as from a storm or hail. However, if the problem arises from age, wear and tear, or lack of maintenance, the insurer may refuse the claim, in which case the owners corporation must still fund the repair itself.
Repairs to the internal ceiling (peeling paint)
The ceiling structure, including gyprock, plasterboard, cornices, and paint, is usually considered part of the building and is therefore covered under strata building insurance. If water ingress damages the ceiling, the strata policy should respond, provided the damage was caused by an insured event. Where the leak is linked to gradual deterioration or poor maintenance, the insurer might reject the claim, but the owners corporation is still responsible for repairing the ceiling as it forms part of the common property.
Repairs to the carpet (water damage)
Items such as carpets, curtains, blinds, and floating floorboards inside a lot are often standard exclusions and not classified as part of the “building” under strata insurance. Instead, these are considered contents belonging to the lot owner and are only insurable under the owner’s personal contents policy. This means that water-stained carpets or similar soft furnishings resulting from a ceiling leak cannot be claimed under strata insurance, and the lot owner would need to claim through their own contents insurance instead.
In short, strata insurance will generally cover damage to the building itself (such as the roof and the ceiling structure) when caused by an insured event, but it will not cover contents such as carpets or furnishings inside your lot. For full protection, owners usually need both strata and contents insurance to cover different aspects of water damage.
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