STRATA-TITLE properties should undergo regular engineering inspections to ensure they are resistant to future extreme weather events to help reduce damage and potentially insurance premiums.
The Insurance Council of Australia engaged the James Cook University’s Cyclone Testing Station to conduct a review on insurance claims on strata properties from recent cyclones, to identify factors that me contributing to insurance losses.
The report came back with several recommendations including undergoing inspections to address any vulnerabilities and also demonstrate to insurers that some buildings may be low risk. It would also improve people’s understanding of a building’s potential performance during extreme weather events.
Director of the Cyclone Testing Station Dr David Henderson said delving into the policy of pricing was outside of the pilot study’s scope, which was provided by the ICA.
‘‘The terms of reference for the pilot study was provided by the ICA and it is my understanding that the study was initiated by the ICA so they can better understand the attributes of the buildings when subjected to severe wind and rain,’’ Dr Henderson said.
‘‘The report was able to demonstrate, in overall terms, the good structural performance of buildings but did show the amount of wind driven rain water ingress and associated damage.
‘‘The work highlighted the importance of maintaining the building envelope – cladding, flashings, guttering, roof – correctly installing items like aircons, antennas and awnings, because when they fail they can cause damage to roof and walls that leads to water ingress into the building.’’
Dr Henderson said people should also have a preparation plan including appropriate measures for items such as shade-cloth awnings/sails, pruning and maintenance.
Insurance Council CEO Rob Whelan said the study found the age of a property had less influence on claims that factors such as water ingress, caused by damage to ancillary items such as aerials and fences.
‘‘The combination of high winds and driving rains typical of cyclones mean that water can find its way through doors and windows, while damage to a TV aerial or to guttering can leave a roof exposed to water and further damage to the interior of a property,’’ he said.
‘‘More than 80 per cent of claims investigated noted some form of damage from water ingress.’’
Mr Whelan said the study also found larger, multi-storey buildings had a higher incidence of claims and claims cost than low-rise buildings because they have more windows and doors exposed to weather events.
‘‘The fact is properties in Tropical Queensland are exposed to a much higher cyclone risk of damage to life and property than most of the rest of Australia,’’ said Mr Whelan.
‘‘Where the risk is higher this is generally reflected in higher insurance premiums. However, the ICA and the insurance industry are committed to working with governments and communities to reduce these risks where possible.’’
In the past 20 years, the ICA has declared 12 cyclones as catastrophes, with these causing combined insured losses of $2.32 billion. The biggest event, Cyclone Yasi in 2011, caused $1.4 billion in insurance losses. Damage caused by ex-Cyclone Oswald in 2013 caused a further $1.1 billion in losses in Queensland and New South Wales.
www. insurancecouncil. com. au/ issuesubmissions/reports/independent-strata-study