Body Corporate Insurance Makes Local Headlines

 

The following article concerning the ongoing body corporate insurance issue in the Far North appeared on the front page of the Cairns Post yesterday. As discussion around this issue grows local leaders are understandably not finding it hard to gain the support of the local community. Almost 20% of the total dwellings in the Cairns greater region alone consist of units within body corporate and strata-title arrangements and all owners of these properties will be effected by the recent insurance premium increases.

Article Text: BODY corporate and strata title owners are demanding a Federal Government-backed reinsurance scheme if an inquiry into the insurance industry does not result in a significant fall in premiums.

The call comes as the House of Representatives Standing Committee on Social Policy and Legal Affairs agreed to consider residential strata insurance as part of its inquiry into the insurance industry.

The agreement was reached after meetings involving property owners in Cairns, Townsville and Airlie Beach were told premiums had soared by up to 400 per cent.

Cairns-based Senator Jan McLucas and the Opposition’s federal member for Leichhardt Warren Entsch joined forces and lobbied in Canberra for the issue to be included in the inquiry.

Strata Community Australia CEO Mark Lever said the reinsurance proposal was quickly gathering momentum.

"The report of the Natural Disaster Insurance Review released last week pointed to a solution in the form of a specialised government-backed reinsurance facility for high risk properties in both flood and cyclone zones and the Government has already indicated it will consult further on this,’’ he said.

"This inquiry is an opportunity to fast-track that consultation and put a solution in place as quickly as possible."

Mr Lever said the community forums last week attracted 400 "angry, frustrated, confused and, in many cases, desperate apartment and townhouse owners and investors" who spoke of premiums rising from 200 to 400 per cent.

The issue affects about 70,000 body corporate property owners north of Rockhampton.

"The meetings heard from pensioners worried they might be forced from their homes, other retirees who could not sell up because of a collapse in the apartment market and investors facing negative returns before interest," Mr Lever said.

"Real estate agents said they could no longer recommend apartments and townhouses as investments and insurers could offer no sign of relief on the horizon.

"With development at a standstill and body corporates slashing maintenance and other spending to cushion the increases, the knock-on effects to the north Queensland economy are continuing to spread."

Swangem on McLeod body corporate chairman Ian Jamieson said he was hoping government pressure and/or intervention would reduce premiums.

"It’s becoming unsustainable. Our insurance has gone from $4000 to $19,000," he said.

Mr Jamieson said they were being discriminated against because of where they lived.

"The insurance companies don’t even come out and inspect the properties to see that ours, which is less than 10 years old, has been built to cyclone standards and even has cyclone shutters," he said.

Mr Jamieson said in Darwin there was a government-owned insurance office and there should be one in Queensland.

Peter Musso - Ray White Cairns Beaches - Real estate agent selling property in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach