High Insurance Premiums in the Firing Line


Far North Queensland strata residents are welcoming a project introduced by major insurer CGU to combat high insurance premiums.

Insurance premiums have increased significantly over the last few years, with catastrophic weather events in the region meaning an increased pricing of risk. The problem has also been exacerbated by a lack of competition in the strata insurance market.

These unaffordable premiums are the target of a new building resilience project to be undertaken by CGU, who along with its wholly owned subsidiary SUU, currently insure hundreds of residential strata buildings in the region.

The project will involve CGU-funded building risk assessments for these properties. The assessments will look at building construction type, exposure to wind-driven rain, and other hazards and defects, with a view to achieving more specific and appropriate pricing of risk.

Airlie Beach resident Margaret Shaw, who has been campaigning for lower insurance costs, welcomed the move, saying “this means proper risk assessment rather than postcode location risk assessment and obviously CGU are acknowledging we do have a problem”.

The building risk assessments will also provide recommendations for residents about repairs to undertake in order to improve the building’s resilience, and potentially its risk rating. Residents who implement repairs could have their buildings re-rated and their premiums reduced.

cycloneSUU has also commenced discussions with a major financial institution in order to avoid funding challenges for bodies corporate when they wish to make the recommended repairs.

Estimated premium reductions are hard to estimate until surveys are complete, but CGU has suggested they could be as high as 25%.

CGU’s parent company, Insurance Australia Group, says its focus is on leading the insurance industry, and creating safer, more resilient communities.

CGU CEO Peter Harmer says: “We understand and empathise with the needs and interests of our customers and North Queensland communities, and we are committed to addressing the concerns they have raised about insurance affordability.”

The project is due to start mid- April.

 



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