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What Does the ACCC’s Final Report Into Insurance in Northern Australia Mean for Strata?

The ACCC released their final report on insurance in Northern Australia late last year as the conclusion of a three-year inquiry. The final report delivered 38 recommendations across 592 pages, however, there were a handful that were highly relevant to everyone in the strata sector.

The 592-page report explored in detail the strata, home and contents insurance markets and provided insights into the market. Read on for some quick takeaways from the report as background to the 38 recommendations.

  • Since 2011, non-insurance rates have increased in Northern Australia by between 7 and 9 percent.
  • Since 2011, 178 percent increase in premiums in Northern Australia versus 52 percent elsewhere.
  • Northern Australians $2,500 premium versus national average $1,400.
  • Northern Australians paid $79.6 million in stamp duties in 2018-19.
  • Between 2007 and 2012, strata insurance premiums in North Queensland had increased by over 300%.

The recommendations – what is relevant to strata?

There are three recommendations that are the most impactful to strata in the report, and then a handful of other relevant, and encouraging recommendations.

Recommendation 8.1 if governments want to provide immediate relief to consumers facing acute affordability pressures, they should consider direct subsidies over other measures.

If implemented, direct subsidies would be paid to individuals who hold strata insurance to directly reduce their cost burden of taking out a policy. There is also a lot to like about direct subsidies to reduce costs for the consumer. If there is enough money made available, they can be very effective because they are a targeted measure that can be implemented immediately. There is, however, a high degree of difficulty in ensuring eligibility requirements are developed and administered effectively, enough money is put aside, the payments are ongoing and there is not a negative market distortion.

SCA in its advice to the ACCC has advocated for the formation of a reinsurance pool to provide adequate cover in the case of a future event and will continue to work with governments to explore the exact means of government intervention.

Recommendation 3.1 abolish stamp duty on home, contents and strata insurance products.

Affordability and availability have been the most common issues faced by people living in apartments, townhouses, and strata-titled properties.

Stamp duties account for up to 10 percent of the premium price, so when you are looking at the average premium of $2,500 in Northern Australia, that is an immediate $250 that each consumer could be putting back in their pocket.

Abolishing stamp duty on insurance is one of the quickest and most effective means to reduce insurance costs.

There was a suite of measures also relating to stamp duty, including rebasing the stamp duty and directing the funds towards mitigation efforts.

Dependent on jurisdiction, however, there are many additional taxes and duties that have significant impact on insurance costs, including emergency levies, GST and others, that need to be analysed for their impact and worked through with the industry.

Recommendation 19.2 – strata managers to be remunerated by body corporate only.

There were two parts to this recommendation, with the report saying:

  • State and territory legislation governing strata managers should be amended to prohibit strata managers from accepting payments in relation to arranging strata insurance other than those agreed to, and made by, their body corporate.
  • Strata managers should be required to negotiate any fees or payments for arranging insurance directly with the body corporate they are servicing. This would encourage remuneration arrangements that better align the interests of the strata manager and their clients.

SCA is raising the profile of strata managers and in particular, the important and time-consuming work they do in relation to insurance. Strata managers are critical to keeping the consumer informed, sourcing insurance policies, negotiating terms and conditions, processing claims, renewing policies and filing reports and updates based on building repairs and maintenance.

What we want to see from government and through our advocacy is a system and reform based on evidence that recognises and promotes the value that strata managers bring in providing the consumer with detailed information and performance that guides them towards good consumer outcomes.

Other Important Recommendations:

There are also a great number of sensible recommendations made in the report and SCA is supportive of the recommendations relating to:

  • Standardising definitions of events such as ‘storm’ or ‘action of the sea’.
  • Making it easier to compare insurance products.
  • Improving building standards and protections

SCA’s Advocacy

Strata Community Association (SCA) has been vocal in reiterating its long-held positions on affordability and availability of insurance, the need for government intervention in the market and the critical role strata managers play in securing good outcomes for consumers.

To aid the work of government and stakeholders within the strata industry to achieve good outcomes for consumers, SCA has formed a national taskforce with the goal of advising stakeholders in each state and territory. The SCA taskforce has commissioned a comprehensive report into strata insurance in Australia, due to be released in mid-2021.

We are looking forward to sharing the findings and engaging with government and stakeholders throughout the first and second halves of 2021.


This article was contributed by Andrew Chambers, President – SCA (National)


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  1. Jasmine Barillaro

    Yes, having no insurance is definitely a game changer. It’s impossible to sell any property without insurance. Secondly, the complex becomes a liability disaster, if anything was to happen., without insurance. The consequences of having no insurance also means no Strata Manager, leaving owners to make decisions based on their own knowledge and may not be aware of the Legislation that is put in place. This then creates different perspectives of how a place should be run with no insurance.
    The complex I live in, originally paid just under $50,000 for insurance P/A. As of the 20/11/20, we were told from our Manager, that we would no longer be insured through our previous insurance company. Then, we were told from our Strata Manager, that they could no longer look after our complex because insurance was not in place. Our only available quote is $235,000. Leaving owners to now fend for themselves because the cost is far beyond anyones normal budget. Leaving us now without insurance and no Strata Management Company. A Strata Management Company that has been in charge of our complex for 13 years. This is definitely a consequence. Though what happens when banks find out, that there is no insurance in place, if an owner holds a mortgage?

  2. Jillian Lord

    I commend the Task Force for this result of investigation, however, we in the Cairns area have been waiting for more than three years
    since we were advised of this task force at a meeting here in Cairns with our Strata Management and many others.
    I only wish is for this to be concluded as soon as possible, making our lifestyle more affordable and also home owners who have been hit just
    as hard with the outrageous charges for Insurance, now with only two options for us in Strata.

  3. Warren Turner

    All of the suggestions above are well and good, but the underlying problem is the horrendous cost of our insurance now, that has risen over 100% over the last 3 years and our insurance broker only able to find ONE company that would even quote!
    I know we’ve had relatively recent events in the Airlie Beach region, but so has the rest of Australia. I don’t know what the answer is, but insurance rates in our region is a huge negative for any form of sustainable business growth.

  4. Bob Chad

    Strata Title Insurance QLD.

    Local Government:
    Local government love unit complexes because of the additional rates on that building block. A great little earner! The current crocodile tears from councils are too late and pathetic.

    Qld State Government:
    Their legislation is that we have to be insured, would you believe for the total replacement cost. Nonsense. The only way newer units complexes here in North Qld would require totally rebuilding is after an Atomic Weapon attack! Once again crocodile tears from this mob as their stamp duty is nearly 10%. This is a great money spinner for them as it is 2 to 3 times what stamp duty is paid by say similar complexes in Brisbane..

    Federal Government:
    Once again a no show. They are responsible for legislation of the Insurance Industry here in Australia. Brokers in Queensland unable to obtain quotes from some insurance company’s as they are exclusively only available by some strata managers. Is this a restriction of trade? Previous commissions to strata managers were immoral and when premiums went up by, in some cases, by up to 500%, these back handers were bordering on criminality . By all means penalize body corporate bodies for petty claims and lack of preventative maintenance but please accept most North Queensland units are relatively new,

  5. Lynda Davis

    I pay some strata fees in my home which is a standalone home with its own private road. I shopped around on my insurances a year ago and even though I could get much cheaper insurance on my car no one would take on the house insurance so I stayed with the existing insurer. There are so many units for sale in Airlie Beach and a lot of reason they can’t sell is because of the rediculously high corporate body fees which includes the rediculously high insurance fees. Something needs to be done about these insurance companies that pick and choose who they will insure The government needs to step in and don’t just talk about. For god sake do something about it. We need rentals but who would want to make such an investment