Non-Strata Unit Block Insurance: What Owners Need to Know
Own a block of units that isn't strata titled? Here's what building and landlord insurance actually needs to cover, and why some insurers say no.
A non-strata unit block is a residential building with more than one dwelling, owned outright by one person, company or trust rather than split into separately titled lots. There is no owners corporation and no strata plan, so if you own one, a single-dwelling landlord policy will not cover the building adequately, and strata insurance is not something you can buy. What applies instead is a block of units policy: one policy covering the whole structure, the common areas and your liability as the sole owner. Here is how that differs from strata cover and what shapes whether an insurer will take the risk on.
1 owner
holds the entire block, every unit and every common area, on a single title
0
owners corporation to share the premium or catch an underinsured building
1 policy
needs to cover the whole structure, common areas and liability together
What is a non-strata unit block?
A non-strata unit block is a residential building with more than one dwelling, held under a single title and owned outright by one person, company or trust, rather than divided into separately titled lots under a strata plan. There is no owners corporation, no body corporate fees and no shared decision-making with other lot owners. The whole building, every unit and every square metre of common area, is one owner’s asset and one owner’s responsibility.
This covers a range of ownership structures in practice: a small block bought as a single parcel decades before it might have been strata titled; a company title building where occupation rights sit with shares rather than a registered lot; or a purpose-built block that has simply never gone through the strata subdivision process.
How is a non-strata unit block different from a strata property?
In a strata scheme, each unit is a separately titled lot and the owners corporation arranges a collective policy that insures the building structure and common property on behalf of all owners.1 A non-strata block has no owners corporation, so that collective arrangement does not exist. There is nobody to split the premium with and nobody else assessing whether the sum insured is adequate. That assessment, and the cost, sits with one owner.
The practical effect is that a non-strata block is insured as a single large asset rather than as a collection of individually owned lots. Where a strata owner insures their own unit’s contents and relies on the owners corporation for the building, a non-strata owner is responsible for the entire structure, top to bottom, in one policy.
There is nobody else checking whether the sum insured is adequate. If a non-strata block is underinsured, the shortfall lands on one owner, not several.
If you are weighing this up for a strata-titled investment property instead, see our guide to landlord insurance vs building insurance, which covers how the two interact at lot level.
What insurance does a non-strata unit block need?
A block of units policy typically brings together several components under one structure.
Building
Not a single-dwelling home policy. Needs to be sized for the full structure: every unit, stairwells, driveways, fencing and any garages or outbuildings on the title.
Public liability
Covers claims where a tenant, visitor or tradesperson is injured in a common area such as a stairwell, car park or shared laundry. See how public liability cover works.
Landlord components
If units are tenanted, cover is selected rather than automatic. Loss of rent, tenant damage and rent default are options you add to a block of units policy, not default inclusions.
Because a non-strata block is one large asset rather than several smaller ones, standard direct-to-consumer building calculators built for houses often do not produce a reliable rebuild figure. Getting a professional estimate of the full reconstruction cost, including demolition and rebuilding to current standards, matters more here than it does for a single dwelling.2
Do non-strata unit blocks need strata insurance?
No. Strata insurance is arranged by an owners corporation on behalf of a strata scheme.1 A non-strata block has no owners corporation to arrange it and no strata plan for a policy to attach to, so strata insurance is not an option regardless of how many units are in the building.
What replaces it is a block of units policy arranged directly by the owner, covering the structure as a single asset rather than as a set of separately titled lots. This is a common point of confusion when a non-strata block later considers strata subdivision, or when a buyer assumes an older block must already have collective cover in place simply because it has multiple dwellings.
Why do some insurers narrow their appetite for block of units cover?
A block of units is assessed as aggregated risk. A single event, a fire, a burst pipe, a storm, can affect several tenancies at once rather than one household, which changes the size of a potential claim relative to a standard house policy.3 Combined with rising rebuilding costs and more frequent severe weather claims across the market generally, some mainstream insurers have become more selective about the multi-unit residential risks they are willing to take on directly.
This does not mean cover is unavailable. It means the range of insurers willing to quote is narrower than for a standard house or a single strata lot, and a broker with access to specialist underwriters is often needed to find a market that will look at the risk properly rather than declining it outright.
What about company title and Torrens title unit blocks?
Whatever legal structure sits behind the ownership, the insurance question is the same: is there a strata plan and an owners corporation, or not.
A company title block is owned by a company, with occupation rights attached to shares rather than a registered strata lot. It is not strata titled, so the same block of units approach applies: one policy, arranged by whoever controls the company or the building, covering the whole structure.
A Torrens title block, the standard form of individual property ownership in Australia, is simply a block held on one registered title in one owner’s name. Again, no strata plan means no strata insurance, and a block of units policy is what fills that gap.
What affects whether an insurer will cover a non-strata block?
A few factors come up consistently when a non-strata block is assessed.
Building sum insured and unit count
Many mainstream insurers cap the number of units they will cover on a single block of units policy, often around four, and separately cap the maximum building sum insured on offer. A block that exceeds either cap needs a specialist underwriter regardless of its risk profile otherwise.
Tenancy type
Long-term residential tenancies are the standard assumption behind most block of units policies. Short-stay platforms sitting alongside long-term tenants change the risk profile.
Mixed use
A block with a shop or office on the ground floor and residential units above no longer fits under a block of units policy once the commercial component is significant. That portion is typically arranged as commercial property cover through a business pack policy instead.
Age and construction
Older buildings, non-standard construction materials and prior claims history all factor into what an insurer is willing to quote and on what terms.
None of these rule cover out on their own. They are the questions a broker will ask before approaching the market, because they determine which insurers are worth approaching in the first place.
Key Takeaways
- A non-strata unit block is a multi-dwelling building owned outright by one person, company or trust, with no owners corporation and no strata plan.
- Strata insurance is not available to a non-strata block, because there is no owners corporation to arrange it. A block of units policy replaces it.
- Building insurance for a block of units needs to be sized for the full structure, not calculated using a single-dwelling home insurance tool.
- Landlord components such as loss of rent and tenant damage are optional additions to a block of units policy, not automatic inclusions.
- Company title and Torrens title blocks are both non-strata for insurance purposes. The question that matters is whether a strata plan exists, not what form the ownership takes.
If you own a block of units that isn’t strata titled and want to check whether your current cover actually protects the building as a whole, Cipher can review it with you. Get in touch.
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.
Footnotes
-
Choosing home insurance, ASIC MoneySmart ↩
-
Insurance explained, Insurance Council of Australia ↩
Frequently asked questions
What is a non-strata unit block?
A non-strata unit block is a residential building with more than one dwelling, held under a single title and owned outright by one person, company or trust, rather than divided into strata lots. There is no owners corporation, no body corporate fees and no shared decision-making with other owners.
How is a non-strata unit block different from a strata property?
In a strata scheme, an owners corporation arranges a collective policy covering the building and common property on behalf of all owners. A non-strata block has no owners corporation, so one owner is responsible for the entire structure and for assessing whether the sum insured is adequate.
What insurance does a non-strata unit block need?
A block of units policy typically combines building cover sized for the full structure, public liability for injuries in common areas and optional landlord components such as loss of rent, tenant damage and rent default if units are tenanted.
Do non-strata unit blocks need strata insurance?
No. Strata insurance is arranged by an owners corporation on behalf of a strata scheme, and a non-strata block has neither an owners corporation nor a strata plan for a policy to attach to. A block of units policy arranged directly by the owner replaces it.
Why do some insurers narrow their appetite for block of units cover?
A block of units is assessed as aggregated risk because a single event can affect several tenancies at once, and rising rebuilding costs and severe weather claims have made some mainstream insurers more selective about multi-unit residential risk. Cover generally remains available, but the range of insurers willing to quote is narrower.
What about company title and Torrens title unit blocks?
Whatever the legal structure, the insurance question is the same, whether a strata plan and owners corporation exist or not. Both company title blocks, where occupation rights sit with shares, and Torrens title blocks, held on one registered title, are non-strata for insurance purposes and need a block of units policy.
What affects whether an insurer will cover a non-strata block?
Insurers weigh building sum insured and unit count against caps that are often set around four units, along with tenancy type, mixed residential and commercial use and the building's age and construction. None of these factors rule out cover on their own, but they determine which insurers are worth approaching.
Questions about your cover?
Cipher can review your current position and explain what you actually have.
Talk to Cipher