There is no question of unlimited liability for this matter and I'm afraid that's a spurious argument. The simple answer is that the Owners Corporation should be insured for most eventualities and the owners' personal home and contents insurance would kick in where the OC's insurance stopped.
I can think of no other area of modern life where we are expected to pay for someone else's mistakes or accidents. You run you car into mine “by accident” your insurer pays, not mine. If you're not insured, my insurance will pay but I will still be chasing you for the excess. And by the way, I think you'll find strata law says quite clearly that there is no limit to Owners' Corporations' liability in anything to do with their strata plan – that's why strata insurance exists.
To get back to this question, basically you are saying that if strata owned pipes burst and take down my freshly painted ceiling, the OC will pay for the ceiling to be replaced but I have to pay for it to be repainted, and for my carpet and furniture to be replaced, even if that blows my no-claims discount or increases my insurance premiums. Where in the Strata Act does it says individual owners have to pay for the mistakes, negligence or accidents of the Owners Corporation.
Even if I had insurance I wouldn't expect it to cover other people's accidents – just mine. If the guy next door floods me out, he pays (or his insurance does). The OC is no different.
I am happy to be corrected on this if someone can quote me one item of strata law that clearly contradicts me. But my advice is that this has been just a matter of (bad) practice in some blocks where ECs have bullied owners into thinking they have to pay for repairs when the liability is clearly theirs.