Terror fund for insurance
MONEY from the Federal Government’s “terrorism fund” could be used to counter spiralling body corporate insurance costs for strata title owners in the Far North.
The House of Representatives Standing Committee on Social Policy and Legal Affairs’ chairman Graham Perrett, MP, said on Monday that “dipping into” the terrorism funds pool established in the wake of the September 11 attacks could be a short-term fix until a permanent solution can be found.
At present there is $13.1 billion in the terrorism fund.
The Australian Reinsurance Pool Corporation which controls this money, is a statutory authority established by the Terrorism Insurance Act 2003, under the Howard government, to administer the terrorism reinsurance scheme, providing primary insurers with reinsurance for commercial property and associated business interruption losses from a declared terrorist attack.
Mr Perrett said the money was first raised after a small percentage was applied to the cost of insuring all commercial buildings across Australia to raise the funds that went into the pool.
“This money really is to help out any city in Australia should we be hit by an act of terrorism,” Mr Perrett said.
“You can imagine that if a major terrorist attack was to befall Sydney, then the $13.1 billion that is in the pool already would barely scratch the surface in rebuilding that city.
“The committee recommends that the Australian Government should investigate and consider the impact on the costs of insurance premiums for strata title properties.”
Mr Perrett said the Federal Government will give a decision on the report on December 1.
With very few insurance companies in the Far North of Queensland wanting to underwrite strata title properties, those that are willing to take on “the risk” have sent premiums soaring by as much as 1000 per cent in the past four years.
Many owners and property managers say they are being held to ransom and are angered by the price hikes in their strata title insurance costs, which they said were killing many businesses and halving the value of their properties.
Meanwhile, Mr Perrett, said that there have been a number of recommendations that have been made since they held their first meeting in Port Douglas on January 30.
And even though the inquiry into residential strata title insurance affordability has largely rejected calls for intervention, Mr Perrett said there were many recommendations that had now been received and the committee would hopefully be in a position sometime next month to release some more recommendations.
“Obviously we will be looking at the companies already providing insurance and the cost of their premiums,” Mr Perrett said.
One of the most significant recommendations to come out of their early findings has called on the Queensland Government to implement a 12-month moratorium on strata title stamp duty.