Far North Insurance Concerns

A hot topic in the north at the moment; body corporate and strata title insurance premiums increasing as a number of insurance providers pull out of the market all together. A supposed rise in the number of natural disasters throughout the region is cited as the reason why compulsory insurance cover for complexes has risen on average by around 400 percent.

The following two articles concerning this topic have recently appeared in the Cairns Post and highlight a real local community concern and call to action by local MP’s.

Insurance Sting Takes Toll - 31st October 2011

THE insurance problems facing the Far North’s body corporate and strata title sector were a bigger crisis than that of southeast Queensland flood victims, an industry leader warns.

Cairns Central Plaza Apartment Hotel

Strata Community Australia chief executive officer Mark Lever said the soaring insurance premiums that body corporates and strata titles were being charged now required government intervention.

He is calling on the Federal Government to provide reinsurance guarantees for the segment in specific areas, including those in cyclone category 3 and higher areas and flood zones.

Mr Lever said he hoped to have some answers from the National Disaster Insurance Review to give to a forum in Cairns in two weeks.

“It’s a massive issue from our members’ point of view. It is causing a dramatic impact on the investment and lifestyle up there (in Far North Queensland),” he said.

Mr Lever said typically there had been 400 per cent increases as well as 200 to 300 per cent on the compulsory insurance cover.

Insurance companies were struggling to obtain reinsurance coverage as no one was prepared to take the risk, he said.

Mr Lever said it was having an impact on the property and development sectors with people reluctant to buy or construct units and apartments in the region.

Federal member for Leichhardt Warren Entsch said his office had been swamped with phone calls from concerned body corporates and property owners.

“It’s quite profound. It’s only going to get worse next year when it comes around again,” he said.

“I have examples over the past four years of insurances increasing from $11,000 to $12,000 to $23,000 and the most recent quote of $ 92,500.”

Mr Entsch said he knew of retirees who could not afford to pay their body corporate fees because of the increase in insurance premiums.

“Many owners are now being forced to borrow money to pay for this year’s body corporate fees,” he said.

Springfield body corporate chairman Don Cunningham said the insurance on their 12 units at Manoora, went from $2350 to $ 3532 last year to $15,500 this year.

View article here

Ease our insurance pain: plea from Far Northern apartment owners and investors - 9th November 2011



Leichhardt MP Warren Entsch

THOUSANDS of Far Northern apartment owners and investors hit by massive hikes in body corporate insurance will have their concerns heard by the consumer rights umpire.

Leichhardt MP Warren Entsch’s push for an inquiry into body corporate insurance has gathered momentum, with the matter now in the hands of the Australian Competition and Consumer Commission.

"Many people are absolutely distraught at the massive hikes in their body corporate insurance premiums and some of them will be out on the street if we don’t get this mess sorted out," Mr Entsch said.

In one example, a customer’s insurance premium rose from $11,000 in 2008 to $92,500 this year.

"This is having a profound impact on strata title owners in the Far North, but I’m also hearing horror stories as far south as Mackay," he said.

Mr Entsch wants strata property owners in the Far North to keep putting pressure on body corporate insurers before the next round of premiums is issued next year.

His campaign has been backed by the local body corporate and strata title sectors, which say price gouging is impacting investment and lifestyles in the region.

Strata Community Australia chief Mark Lever said there were 70,000 units between Mackay and Port Douglas, and body corporate insurance affected a cross-section of the community.

"This is owners, investors, retirees, holiday homes – a lot of people are impacted by these rises," Mr Lever said. He will host a forum for strata property owners in Cairns on Monday.

Mr Entsch blamed the huge price hikes on the insurance giant Zurich forcing other companies out of the market by undercutting costs and then raising premiums by as much as 800 per cent.

But Zurich insists its premiums reflect the growing cost of doing business in the Far North after natural disasters such as cyclones Larry and Yasi in recent years.

Mr Entsch has urged affected property owners to attend the Natural Disaster Insurance Review at the Holiday Inn on November 14.

View article here

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