What the New NSW Disclosure Rules Mean for Strata Cover

For committees, the significance is not simply that more information may appear in renewal papers. The bigger shift is that insurance decisions are likely to be judged more closely against process: what options were considered, how conflicts were managed, whether commissions were transparent, and whether the final recommendation was in the scheme’s interests. That matters because insurance is often one of the largest annual expenses for a strata community, and premium increases are ultimately felt by lot owners through levies.

This is an extension of the trust and governance issues already highlighted in previous reporting. While individual enforcement matters and reform processes differ, the common theme is that owners want clearer visibility over who is being paid, by whom, and for what service. A renewal pack that lists only the selected policy price may no longer be enough to satisfy well-informed committees.

In practical terms, owners corporations should use the reforms as a prompt to sharpen their internal insurance checklist. Before approving a renewal, committees should ask whether multiple options were explored, whether major exclusions or excess changes have been explained, and whether the building sum insured remains realistic. Premium comparison alone can be misleading if one policy has narrower flood wording, higher water damage excesses, lower catastrophe allowances or weaker liability protections.

The sum insured question is especially important. Higher rebuilding costs, professional fees, debris removal, compliance upgrades and delays in construction can all affect whether a scheme is adequately protected after a major event. Committees that want to estimate current rebuild costs should treat any calculation as a planning tool rather than a substitute for a formal valuation, but it can still help identify whether a deeper review is needed.

The best response is not to treat disclosure as a paperwork exercise. It should be part of a broader governance rhythm: document the questions asked, record the reasons for accepting a recommendation, review conflicts, and make sure owners can understand the trade-offs. In a market where strata insurance cost, coverage and availability remain under pressure, transparent process is becoming a core part of protecting the scheme.