However, some customers may have noticed that premiums for cover have been rising at a steady rate recently.
Strata Plan sat down with CHU Strata Insurance Business Development Manager Scott Allen to chat about the state of the strata insurance market and what is causing the rises.
There is a range of factors that affect the cost of premiums for each individual property.
These can range from the number or nature of past claims or the age of a building, but there are a number of market-wide factors that can help shape the general trend of insurance prices.
CHU Strata Insurance Business Development Manager Scott Allen said there would be price increases across the board for the foreseeable future.
“There’s always going to be a cycle to insurance. You’re going to have times where prices are cheap and times where prices are expensive,” Mr Allen said.
“At the moment, we’re in what we call a hard market cycle, simply due to the number of claims that have been happening across the board over the last few years and the fact that prices have actually gone down over the last few years.
“Prices needed to become increased to become sustainable. Prices have been going up slowly, it hasn’t been a sharp increase, which you sometimes see after large claim events.”
Mr Allen said that it was important that Owners Corporation’s budget for increases in their insurance premiums over the next 12 months.
“Owners Corporations should generally be able to get away with budgeting for between 10-20 per cent, depending on what their individual experience is like,” Mr Allen said.
“Premiums just need to become more sustainable to ensure claims can be paid for and coverage is there for the OC.
“As always, there’s a price for every risk and we have to make sure the price reflects the risk of that site.
“Even when prices go down, the average cost of a claim doesn’t. The cost of labour and parts goes up year on year on year and the premium increases are simply reflective of that.”
While insurance premiums are increasing, some insurance companies are increasing the scope of coverage provided.
CHU, for instance, is now including coverage for floating floors as part of their standard coverage.
“From the middle of March for residential properties and mid-July 2018 for commercial properties, CHU is actually including floating floors as part of our standard coverage,” Mr Allen said.
“If you’ve got an existing policy with CHU and your renewal is after these dates, or your policy incepts after these dates, you’ll have floating floor coverage.
“We’re one of the few insurers that provides this in the strata place and we believe this is a big benefit as we’re starting to see them more and more often.
“Historically, they’ve been excluded, simply due to the Act, but we understand the need to have them covered and have done so.”
The information provided above is general in nature. Please consider your own and your Owners Corporation’s circumstances before acting on any information provided here.
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