Short answer
Strata insurance premiums rise for several reasons, most of them outside any one scheme’s control — higher rebuilding costs, the scheme’s claims history, the building’s risk profile (age, defects, cladding), and broader insurance-market conditions. A higher sum insured after a new valuation also lifts the premium. Comparing quotes and maintaining the building can help, but some increases are market-driven and hard to avoid.
What drives the premium
A jump in a strata premium often isn’t the committee’s fault. The biggest single factor is usually the cost to rebuild, which has risen sharply in recent years and feeds directly into the sum insured. On top of that, insurers price the scheme’s own claims history, the building’s risk profile (its age, known defects, combustible cladding, and similar), and the wider insurance market, which tightens and softens over time.
Why a valuation can change it
When a scheme obtains an updated replacement-cost valuation and the sum insured goes up to match, the premium usually rises with it. That isn’t a bad outcome — insuring for too little leaves the scheme unable to fully rebuild after a major loss — but it does explain part of an increase in a year a new valuation lands.
What a committee can influence
Not everything is fixed. Obtaining multiple quotes (directly or through a strata broker), keeping the building well maintained, addressing known defects, and managing claims sensibly can all moderate what a scheme pays. But it’s worth being realistic: in a hard market, even a well-run scheme can see increases it cannot fully offset.
Staying on top of the numbers
Understanding and challenging a premium increase is easier for a self-managed committee when the policy history, valuation and past quotes are in one place. A system such as Straita keeps prior premiums, the valuation and renewal details together, so the committee can see what changed year to year, seek fresh quotes ahead of renewal, and make an informed decision rather than simply accepting the new figure.
Primary sources
- Strata Schemes Management Act 2015 (NSW) — the duty to insure the building for its replacement value (ss 160–161), which sets what the premium is charged against.
- NSW Government — Strata schemes (Fair Trading) — strata insurance and premiums.