What Climate Risk and Claims Trends Mean for Owners Corporations
Strata insurance is entering 2026 in a very different position than where it sat just a few years ago. While premium volatility has eased compared to the post-pandemic hard market, the underlying risks facing strata properties have not disappeared; they have evolved.
Extreme weather events, rising claims costs and increased scrutiny around building condition and maintenance are continuing to shape how strata insurance is underwritten across Australia. Recent catastrophe reporting from the Insurance Council of Australia reinforces a reality many owners’ corporations already understand: large-scale loss events are no longer rare, and insurance outcomes are increasingly tied to risk quality, not just price.
Catastrophe Losses Are Reshaping the Strata Insurance Landscape
A sustained pattern of severe weather events across multiple states was highlighted in the latest catastrophe analysis from the Insurance Council of Australia. This included floods, storms and cyclones. These events have generated billions of dollars in insured losses over recent years, with a significant portion linked to residential and strata property.
From a strata insurance perspective, this matters because multi-unit buildings tend to experience more complex claims. Damage often affects common property, shared services and multiple lots simultaneously, which can extend repair timeframes and increase overall claim costs.
As a result, insurers are paying closer attention to where and how strata buildings are exposed, particularly in locations with a history of weather-related losses.
Why Strata Insurance Is Being Underwritten More Closely
Although pricing has stabilised in some areas, strata insurance is now assessed through a far more detailed risk lens than in the past. Insurers are looking beyond basic property details and focusing on factors such as building age, construction materials, maintenance standards and risk controls.
Underinsurance also remains a recurring issue. Inadequate or outdated building valuations continue to surface at claim time, often when repair costs exceed expectations. When this happens, owners’ corporations can be left funding shortfalls at precisely the moment financial pressure is already high.
In 2025, insurers expect strata properties to demonstrate an understanding of their own risk profile, not just rely on annual renewals to carry that burden.
Climate Risk Is Now a Core Strata Insurance Consideration
Climate risk is no longer a theoretical concern for insurers. It is embedded in how policies are structured, priced and, in some cases, restricted.
For strata properties, this can mean higher excesses for weather-related claims, tighter policy conditions, or reduced insurer appetite in higher-risk locations. Buildings with poor drainage, ageing infrastructure or limited maintenance records may face more challenging insurance outcomes over time.
Strata insurance is increasingly influenced by how well risks are identified, managed and communicated, not just whether cover exists.
What Owners Corporations and Strata Managers Should Be Thinking About
The most common strata insurance issues don’t arise at renewal. They emerge when a loss occurs, and assumptions are tested.
In today’s market, owners’ corporations should be asking whether their sums insured still reflect real replacement costs, whether policy wording aligns with how the building is used, and whether exclusions or sub-limits could materially affect a future claim.
Strata insurance works best when it is reviewed with context, not treated as a standardised product.
Barrack’s Insurance View
At Barrack, we see strata insurance as a critical part of broader property risk management, not just an annual compliance task. As catastrophe exposure continues to influence insurer behaviour, informed advice and proactive reviews make a measurable difference.
Our role is to help strata clients understand how market conditions, climate risk and claims trends affect their cover, and to ensure insurance decisions are made with clarity, not assumptions. You can learn more about Barracks experience with Strata Insurance here.
If you haven’t reviewed your strata insurance recently, now is the right time.
Speak with Barrack about whether your current policy reflects the realities of today’s risk environment, not yesterday’s market.
