THROUGH THE ROOF
Unit insurance bill shock out of the strata-sphere
UNIT owners in Townsville have been warned to brace for 30 per cent hikes in insurance premiums due to murky industry arrangements in the strata title market.
But as some professionals warn the problem has the potential to destroy North Queensland community title schemes, peak bodies Body Corporates Services and the Insurance Council of Australia declined to comment. In one example of shocking premium hikes, the insurance bill for a 56-unit complex in Wulguru jumped from $17,000 to more than $100,000, before coming down to $55,000.
LONG suffering unit owners in Townsville are being warned to brace for 30 per cent hikes in insurance as murky industry arrangements continue to dog the strata title market.
Some professionals warn the problem has the potential to destroy North Queensland community title schemes.
Unit owner and body corporate committee chairman Bob Chad has sounded the alarm after their body corporate manager told him to expect 30 per cent increases in premiums this year.
When contacted by the Bulletin, Body Corporate Services refused to confirm the advice while industry representative the Insurance Council of Australia said it did not comment on individual cases.
This is despite the insurance council being asked whether the forecast increase tallied with what it was seeing in the market.
Mr Chad said their 56-unit Wulguru complex had seen huge volatility in their insurance premiums, jumping from $17,000 to more than $100,000 in recent years before coming back to $55,000 by changing insurers and ending an arrangement where brokers and body corporate managers were creaming 20 per cent in commissions.
Mr Chad said that they hadn’t lodged an insurance claim “for years” and had passed a James Cook University engineering assessment for resilience.
He was concerned they were paying for the flood damage to other unit complexes in Townsville.
“The more people speak up about it, hopefully, the politicians will do something about it,” Mr Chad said.
Townsville lawyer David Bowers is an owner in one of several unit complexes on Magnetic Island who have had to go offshore to Lloyds of London to obtain insurance.
Mr Bowers said their premiums for a 20-unit complex had increased from $84,000 to $240,000 and the issue had the potential to destroy community title schemes in North Queensland. Plans for a reinsurance scheme backed by the Federal Government was the only workable solution, he said.
“If you want people to live and work in North Queensland a solution has to be brought to the table to make insurance premiums relatively affordable,” Mr Bowers said.
North Queensland manager for brokers Aon Risk Solutions David Reid said they charged fees for service but the use of commissions remained prevalent and arrangements between brokers, body corporate managers and insurers could be “cosy”.
But Mr Reid said increases were being driven by reinsurance costs.
“We are at the mercy of institutional investors globally for reinsurance,” Mr Reid said.
“Yes, brokers are still taking commissions and stamp duty continues to increase by way of premium increases and so does the amount of (GST) revenue generated.
“Everyone is being incentivised along the way.”