We wanted to keep you informed about the current trends in strata insurance premiums. Nationally, we’re seeing increases of about 15-20%. These hikes are due to rising claims costs, higher building valuations, and insurers adjusting rates after periods of losses. Looking ahead, it’s wise for committees, lot owners, and body corporate managers to anticipate similar increases: 15-20% for those with clean claims records and up to 30% for those with challenging claims histories or outstanding building defects. On a positive note, premiums for desirable risks are starting to stabilize as new underwriters enter the market.
Challenges in the Strata Market
For buildings with existing defects or major works, getting multiple insurance quotes can be tough. Often, only the current insurer is willing to provide a renewal quote. Insurers are cautious about taking on new business with outstanding issues due to the potential for future claims.
In the ACT, we’re noticing larger strata developments with higher insured values. Currently, only one insurer is willing to cover buildings valued over $220 million. This can limit options for owners’ corporations, making it harder to shop around and negotiate at renewal time.
New Best Practice Guide
The Strata Community Association (SCA) has released its ‘Strata Insurance Disclosure Best Practice Guide’. This guide outlines essential changes in how SCA members disclose strata insurance practices.
At Vantage Strata, we’re proud to follow this guide. You can find our policies on our website, which are now included in AGM agenda packs.
What Does Best Practice Mean for You?
Building Understanding: Ensuring strata committees understand their choices, options, and fee breakdowns related to their insurance policy.
Positive Consumer Outcomes: Improving relationships, conversations, understanding, and outcomes for strata insurance consumers.
Transparency and Choice: Raising the bar for transparency, choice, and communication in strata insurance.
Timely Communication: Providing clear and timely communication with at least three touchpoints – at the time of quote, invoice, and the AGM.
Concise Information: Offering clear and simple explanations of the roles and responsibilities of the strata manager, broker, and insurer, and the strata insurance process.
Remuneration Disclosure: Including FAQs and information about who is paid what, and why, in dollar values with invoices, quotes, and at the AGM.
We hope this update helps you stay informed and feel confident about your strata insurance. If you have any questions, please don’t hesitate to reach out.