Common Property Insurance in a Community Association

What You Need to Know

If you live in or own a lot in a community title scheme in Western Australia, you’re sharing ownership and responsibility for common property — things like driveways, gardens, lobbies, pools, and shared walls.

And with shared property comes shared risk — which is why common property insurance isn’t just a good idea, it’s a legal requirement.

What Is Common Property Insurance?

Common property insurance is a specialised form of building insurance taken out by the Community Association (i.e. the overarching body responsible for the scheme). It protects the shared areas and structures of a community title development against risks like fire, flood, storm damage, or vandalism.

Importantly, it ensures that all owners in the scheme are financially protected if something happens to the parts of the property that none of them own outright, but all use.

Why Is It Mandatory in WA?

Under the Community Titles Act 2018 (WA) and the Community Titles (General) Regulations 2021, it is a legal obligation for Community Corporations to arrange insurance for:

• The building (if one exists) and any improvements on the common property

• Common assets (e.g. lifts, fences, shared plant equipment)

• Public liability, with a minimum cover amount of $10 million

  
  

This helps ensure that repairs, rebuilding, or legal liabilities don't become a financial burden on individual owners if something were to go wrong — especially when multiple lots and shared areas are affected.

Failing to meet these insurance requirements may place the Community Corporation in breach of the Act, and leave all owners financially exposed.

What Does Common Property Insurance Cover?

The policy taken out by the community association typically covers:

• Structural elements of shared buildings (e.g. foundations, shared walls, roofs)

• Common areas – foyers, driveways, pools, gyms, gardens

• Common infrastructure – lifts, air-conditioning systems, lighting

• Damage from storms, flood, fire, vandalism or impact (e.g. falling tree)

• Public liability – injury or property damage suffered by someone in a common area due to negligence

  
  

Depending on the setup of the property and scheme bylaws, it can also cover improvements (e.g. fencing, pergolas) and sometimes fixed contents like carpets or appliances in common buildings.

What’s Not Covered?

While comprehensive, common property insurance has exclusions you should be aware of:

• Property inside individual lots (your personal fixtures, flooring, furniture)

• Maintenance issues or wear and tear

• Damage from illegal or unapproved building works

• Short-term rentals or business activities (unless disclosed and approved)

• Items or improvements not recorded on the strata plan or lot entitlements

  
  

That’s why lot owners should also have separate contents insurance, and in some cases insurance for internal fixtures and fittings (especially in bare lot schemes or older plans with varying obligations).

Who Pays for It?

The cost of the common property insurance is shared between all lot owners in the Community Scheme, based on their Unit Entitlement — a value assigned when the scheme is registered that reflects their share of ownership.

Premiums are paid by the Community Corporation and then included in your strata/community levies.

If upgrades to common property or regulatory changes mean the insurance premium rises, it’s the owners who carry those increases.

Annual Obligations

The Community Corporation must:

• Review the policy annually to ensure it meets legal requirements

• Adjust building sum insured values to reflect current rebuilding costs

• Keep records of the insurance certificate for inspection by owners

  
  

A specialist insurance broker experienced in community schemes can help ensure the policy stays compliant and reflects the actual risks faced by the property.

Common property insurance is more than just a legal box to tick — it is a shared safety net that protects the physical structure and financial security of every owner in the scheme.

Without it, the cost of a fire in a shared stairwell, a slip-and-fall on a wet driveway, or a storm-damaged roof could quickly lead to major repair bills or lawsuits.

For Community Corporations in WA, ensuring the insurance is correct, compliant and up to date is not only required — it’s responsible.