Strata Title Insurance Relief in the Far North Rejected

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A 12-month moratorium on the stamp duty paid on body corporate insurance has been ruled out by the State Government.

The decision follows a call by a body corporate industry leader to commit to a recommendation from a federal inquiry into residential strata title insurance last year that the Federal Government liaise with the Queensland Government to implement a 12-month moratorium on stamp duty to give some relief to property owners facing soaring bills.

Archers Body Corporate Management director Colin Archer said the 12-month stamp duty moratorium would provide a rebate equivalent to additional tax paid by North Queensland home owners on top of extra insurance costs.

But a spokeswoman for the State Treasurer Tim Nicholls said a moratorium would “not address the underlying causes of rising insurance costs.”

“The Queensland Government has no legislative jurisdiction over general insurance matters and cannot intervene in the decisions made by private companies as to the level of premium payable,” she said.

“Providing an exemption to specific types of entities in specific regions of the state would be inequitable to others who have been similarly affected.

“Duty exemptions for body corporate insurances would establish a precedent with potentially significant revenue consequences for the state.”

The spokeswoman said Queensland has the lowest rate of duty on strata title insurance in Australia.

“Land tax in Queensland is 20 per cent lower than the national average and transfer duty (stamp duty) is 12 per cent below the national average,” she said.

Article printed by The Cairns Weekend Post - Saturday 9th February 2013

Peter Musso licensed real estate agent at Ray White Smithfield selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica, Kamerunga and surrounds.

Petition for Action on Strata Insurance Premiums

The Federal Government's failure to implement the recommendations of a bi-partisan Inquiry into strata insurance price hikes has led to the launch of an online petition by North Queensland residents. The petition will be sent to insurance companies, the Insurance Council of Australia and state and federal MP's.

View page here to sign the petition:

www.change.org/queenslandinsurance

Peter Musso licensed real estate agent at Ray White Smithfield selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica, Kamerunga and surrounds.

Solution Demanded to Stop Soaring Strata Insurance

The following article was posted in the Australian Property Investor addressing what has proved to be a real sticking point for buyers and sellers of strata-titled properties in North Queensland lately.

With only two (2) insurers remaining willing to cover the vast majority of apartment complexes in the Far North it is clear that the market for strata-titled insurance has failed and measures need to be taken in order to restore competitiveness to reduce costs to rate payers.

THE Queensland Government has until December 1 to announce how it will bring affordable insurance back to the north and far north Queensland region, according to Federal Member for Leichhardt Warren Entsch.

Thousands of unit owners in north and far north Queensland are becoming crippled by hiking strata insurance costs, as insurers blanket ban strata insurance coverage simply to minimise their exposure to cyclone-prone coastal areas, in many cases north of Mackay.

Unit owners are angry because on buildings valued at $5 million-plus they’re left with the choice of only two insurers – a duopoly – translating to escalating costs on what is a mandatory insurance obligation for body corporates.

The other insurers who’ve dropped like flies from the region have not considered each suburb and area on a case-by-case basis or even the structural integrity of a building and its ability to withstand a cyclone; or if a building has ever been damaged by a cyclone.

Entsch said since a public inquiry took place in late January, he’s heard many stories of insurance quotes that have skyrocketed.

“One letting agent in Cairns, Linda Tuck, reported that last year the cost of insurance for a two-bedroom, one‐bathroom duplex with a value of around $350,000 was $941,” said Entsch.

Federal Member for Leichhardt
Warren Entsch 

“This year, she was told that the insurer… had withdrawn from domestic property insurance for all locations above Mackay.

“With only two insurers willing to quote, the prices jumped to the ridiculous level of $4803… and $4439 with (the other two insurers).”

In his speech to parliament recently, Entsch made it clear the market had “clearly and totally failed”.

The Federal Government has until October 1 to complete the reviews recommended by the Standing Committee on Social Policy and Legal Affairs as tabled in its second In the Wake of Disasters report in March.

The government then has until December 1 to outline its solution on how to reduce the insurance costs for unit owners and make policies more competitive again.

View article source HERE

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.

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

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