Insurance

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<p>The peak body representing Queensland’s 77 councils is urging the Federal Government to establish a national reinsurance pool to help reduce the cost of property owner insurance premiums in North Queensland and across northern Australia.</p>

<p>The Local Government Association of Queensland President and Sunshine Coast Council Mayor Mark Jamieson said figures contained in the Australian Competition and Consumer Commission’s inquiry into insurance in Northern Australia, released in December, were stark.</p>

<p>“The ACCC found insurance premiums had risen by up to 178 per cent in Northern Australian over the last decade, compared to 52 per cent elsewhere,” Mayor Jamieson said.</p>

<p>“More than 62,000 properties in North Queensland are currently uninsured, with more than 95 per cent of those uninsured property owners citing cost as a reason, the ACCC found.</p>

<p>“This is just simply unacceptable in a state as highly vulnerable to natural disasters as Queensland.</p>

<p>“Our member councils want a reinsurance pool established to help reduce those costs so their communities are not unfairly burdened, and we support their call.</p>

<p>“We urge the Federal Government to work with the councils as leaders of their communities to ensure an effective scheme is implemented before the next disaster season.” </p>

<p>Townsville Mayor Jenny Hill said the Commonwealth Government could no longer continue to bury its head in the sand on the issue. </p>

<p>“The ACCC took three years to complete its investigation into insurance in Northern Australia and over that time the situation has further deteriorated. </p>

<p>“Homeowners, renters, businesses, body corporates – the prohibitive cost and, in some cases, lack of availability of insurance, is seriously impacting communities.</p>

<p>A reinsurance pool already exists through the Australian Reinsurance Pool Corporation, set up by the Howard Government in 2003 to address a previous instance of market failure for terrorism reinsurance scheme.</p>

<p>“The insurance market in Northern Australia has clearly failed and it’s time for a national reinsurance pool to help reduce the cost of insurance premiums.”</p>

<p>Whitsunday Regional Council Mayor Andrew Willcox said it was frustrating that the recommendations in the recent ACCC report did not go far enough to protect his community against huge insurance premiums that are double the rest of Australia.</p>

<p>“It is really difficult for the people from the Whitsundays and North Queensland who are paying so much insurance so we are calling on the Commonwealth to help us develop the north.</p>
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jchancellor

Queensland councils urge government to reduce the cost of property owner insurance premiums

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<p>Unaffordable home, contents and strata insurance is a major challenge to the liveability and prosperity of communities, towns and cities across northern Australia, but a range of actions could help address this, according to a major report published by the ACCC.</p>

<p>The final report of the ACCC’s three year Northern Australia Insurance Inquiry shows that home, contents and strata insurance premiums are, on average, considerably higher in northern Australia than the rest of the country, and over the past decade have increased at a faster rate.</p>

<p>Rising insurance costs are leading to higher rates of non-insurance in northern Australia, leaving more households and communities financially vulnerable to the impact of severe weather events, and potentially hurting the economic development of the region.</p>

<p>Insurers are increasingly assessing and pricing risk, based on a home or building’s individual characteristics and address rather than at a postcode or regional level, especially for cyclone or flood risk. This has resulted in very significant premium increases for some households.</p>

<p>“This inquiry has examined insurance in northern Australia in unprecedented breadth and detail, using an extensive volume of documents and data from insurers, and taking in significant information and feedback we have received from industry, local residents, consumer groups and communities across northern Australia,” ACCC Deputy Chair Delia Rickard said.</p>

<p>“We know that there are real reasons for more expensive insurance premiums in northern Australia. The risk of extreme weather is higher and it can be costly for insurers to service these regions. However, different insurers can quote vastly different premiums for the same property. While many consumers could save by switching, it is harder than it should be for consumers to shop around.”</p>

<p>“Our analysis has shown that, with the right actions, northern Australian insurance markets could work much better for consumers. We believe our wide-ranging recommendations would address many of the problems we have identified,” Ms Rickard said.</p>

<p>“Many of our recommendations, if adopted more broadly, could also benefit consumers and insurance markets across Australia.”</p>

<p>The ACCC has made 38 recommendations in this final report, including 11 new recommendations, that seek to improve outcomes in the short, medium and long term.</p>

<p>The inquiry considered a range of options that have been suggested to governments to improve affordability. The ACCC has recommended that, if governments want to provide immediate relief to consumers facing acute affordability pressures, subsidies be used in preference to other measures such as government reinsurance pools.</p>

<p>“Direct subsidies can be used in a highly targeted way to relieve some of the acute financial pressures faced by households in specific areas, at a lower cost and more effectively than other measures,” Ms Rickard said.</p>

<p>“We do not believe that government insurers and reinsurance pools can lower premiums without the government subsidising the insurer in some way. These measures also can’t be targeted to those consumers most in need, and so are more costly. Further, they involve transferring significant risks from insurers and reinsurers to governments, who are not well placed to manage them.”</p>

<p>Other recommendation that would provide immediate assistance include abolishing stamp duty on home, contents and strata insurance or, if it is maintained, that it be based on the sum insured of a property rather than the premium amount. The report notes that the rise in premiums on insurance in northern Australia has resulted in significant windfall gains for state and territory governments.</p>

<p>“We continue to advocate that a portion of any stamp duty revenue should be devoted to improving affordability of insurance for low income consumers or to funding mitigation works,” Ms Rickard said.</p>

<p>“However, the best outcome for consumers would be for stamp duty to no longer be applied to home, contents and strata insurance, which are often considered essential products that some households struggle to obtain.”</p>

<p>We also recommended that insurers provide more short-term help for customers struggling to pay their premiums when due, such as by deferring payments, reducing or waiving surcharges for monthly payments, or offering payment plans.</p>

<p>“The industry has no standard approach to assisting customers struggling to pay their premiums,” Ms Rickard said.</p>

<p>“It is crucial that we help households hold onto their insurance, because becoming uninsured can result in much greater financial hardship in the future if homes or possessions are impacted by a severe event.”</p>

<p>Better disclosure of surcharges imposed on monthly instalments has also been recommended, so that consumers can compare the difference in cost in dollar terms between paying annually or monthly. Some insurers apply a surcharge of up to 20 per cent, which can add hundreds of dollars a year to the cost of insurance.</p>

<p>The inquiry has also made a series of recommendations relating to risk mitigation, including new recommendations designed to make insurance more affordable in the future by reducing the risk of property loss or damage.</p>

<p>These include expanding the remit of the Australian Building Codes Board to explicitly include property protection as an objective when developing the National Construction Code, and that Standards Australia and the insurance industry develop voluntary standards for more resilient buildings, for both new homes and for retrofitting of existing homes.</p>

<p>“Importantly, we are calling on the insurance industry to commit to taking into account resilience measures when setting premiums,” Ms Rickard said.</p>

<p>The inquiry also looked at how risk data could be better shared and at improvements to land use planning.</p>

<p>The new recommendations add to the previous recommendations made by the inquiry over the past three years. These have included measures to make pricing more transparent, a ban on conflicted remuneration for insurance brokers and strata managers and that a national home insurance comparison website be considered.</p>

<p>During the past three years the ACCC considered more than 420 submissions and held public forums in Townsville, Cairns, Rockhampton, Mackay, Broome, Karratha, Darwin and Alice Springs.</p>

<p>“We have heard first-hand how many residents of northern Australia are struggling to find suitable and affordable insurance in this market, and the considerable impact this is having on them and their communities,” Ms Rickard said.</p>

<p>“We believe the work of this inquiry and the implementation of our recommendations will make a difference for people living in northern Western Australia, northern Queensland and the Northern Territory, and contribute to the long-term prosperity and liveability of this important part of Australia.”</p>
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The final report of the ACCC’s three year Northern Australia Insurance Inquiry shows that home, contents and strata insurance premiums are, on average, considerably higher in Queensland than the rest of the country

urban.com.au

Regional Queensland communities need more affordable strata insurance: ACCC

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<div>Monoline mortgage insurer Genworth Mortgage Insurance Australia (GMA) released its FY15 results late last week, with new CEO (and fellow former Deloittian) Georgette Nicholas taking the helm for its latest investor presentation.</div>
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<div>As expected following the loss of a key contract gross written premium was down by 20 per cent from FY14, largely due to Westpac canning its Lenders Mortgage Insurance (LMI) deal with Genworth in February 2015, but underlying earnings performance remained resilient.</div>
<p><a href="/images/2016/02/08/GMA1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/02/08/GMA1.jpg" alt=""></p>
<div> </div>
<div>The number of paid claims was well down to 616 in 2H15 from 664 in the prior corresponding period of 2H14 (and way down from 1,091 in 2H13) although the average paid claim increased year-on-year to $63,500 from $54,400.</div>
<p><a href="/images/2016/02/08/GMA2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/02/08/GMA2.jpg" alt=""></p>
<p><br><strong><span style="text-decoration: underline;">Delinquencies very low</span></strong></p>
<div> </div>
<div>Genworth's ASX releases are perhaps most interesting for their ongoing insights into mortgage delinquencies, and the latest presentation showed that delinquencies remain at a very low level of just 0.38 per cent nationally. </div>
<div> </div>
<div>Queensland has the highest delinquency rate of the states (0.53 per cent), in no small part thanks to the now discredited belief that house prices and vacancy rates in mining towns could emerge unscathed from the end of the resources construction boom. </div>
<div> </div>
<div>Queensland's delinquency rate has also been elevated since the 2011 book year when delinquency developments were exacerbated by flooding across huge swathes of the state.<br><br>Strip out those exceptional items and mortgage books in the remainder of the Sunshine State are in reasonably solid nick.</div>
<div> </div>
<div>South Australia is next in line at 0.51 per cent, perhaps unsurprising given the elevated rates of unemployment consistently being recorded in Adelaide and regional South Australia. </div>
<div> </div>
<div>Delinquency rates were exceptionally low in New South Wales for such a populous state at just 0.27 per cent.</div>
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<div class="separator"><a href="/images/2016/02/08/GMA3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/02/08/GMA3.jpg" alt=""></div>
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<div>Mapping GMA's delinquency developments by book year shows how delinquency rates have cascaded handsomely lower since the particularly troublesome 2008 and 2009 book years. </div>
<p><a href="/images/2016/02/08/GMA4-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/02/08/GMA4-1.jpg" alt=""></p>
<div><strong><span style="text-decoration: underline;">Share price rebound</span></strong></div>
<div> </div>
<div>The share price responded positively to the FY15 investor presentation to trade up by +4.33 per cent by the market close yesterday at $2.65.</div>
<div>
<span style="line-height: 1.3em;"> </span><br><div class="separator"><a href="/images/2016/02/08/GMA6.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/02/08/GMA6.jpg" alt=""></div>
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<div>If Genworth is perceived to be any kind of worthwhile bellwether for property market sentiment (commonly claimed when the market cap is down) then the 20 per cent recovery in the share price from $2.21 to $2.65 augurs well for the mortgage default outlook.<br><br>This is particularly so given that the share price dipped sharply in September as the APRA crackdown on property investors bit hard, adversely impacting expected volumes through 2016.<br><br>The Genworth share price had slumped to a 52 week low of $2.21 on September 2015 as the Glencore share price crash rocked commodities companies and share market confidence.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

Genworth's mortgage delinquencies remain low

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<p><span>The cost of insurance claims from four natural disaster catastrophes declared over the 2019-20 summer has passed $5.19 billion, with more than 15,000 new claims worth $270 million lodged in the past four weeks.</span></p>
<p><span>ICA Head of Communications Campbell Fuller said: </span><span>“</span><span>Thousands of new claims and property loss assessments have pushed total claims to more than 288,100 and the estimated damage bill to more than $5.19 billion.</span></p>
<p><span>“</span><span>Insurers have already paid more than $2.85 billion for emergency accommodation, business interruption, repair and rebuilding work, replacement of motor vehicles and goods, services and settlements. This is despite the widespread impact of the natural disaster season and the handbrake effect of COVID-19.</span></p>
<p><span>“</span><span>Almost 50 per cent of claims from the four storm, bushfire and hailstorm catastrophes have been closed by insurers </span><span>– </span><span>an extraordinary result for households and businesses affected by these disasters.</span><span>”</span></p>
<p><span>The COVID 19 pandemic was declared a Catastrophe on March 11, 2020. The industry is assessing the impact it is having on claims and customers.</span></p>
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j.ballantyne1990-6AQqhLzZaK

Insurance bill for season of natural disasters climbs over $5.19 billion for 2019/2020

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<p class="p2">Landlord insurance during the current rental crisis during the pandemic has emerged as complicated.</p>
<p class="p2">Agents and landlords have rejected rent decreases by saying it could invalidate the agent’s insurance policy.</p>
<p class="p2">It is the case but not for every policy.</p>
<p class="p2">Most policies do require proof of eviction or intention to re-let a home to claim for loss of rent, which some landlords might be considering if their tenants can’t pay.</p>
<p class="p2">Most insurers have stopped issuing new products until they receive certainty about evictions and non-payment of rent for tenants in hardship.</p>
<p class="p2">Existing policies will continue to be honoured, but landlords will need to find out if their insurer has waived the need to evict or show intention to re-let to claim for loss of rent.</p>
<p class="p2">IAG insurers NRMA, CGU, WFI, SGIO and SGIC have waived this requirement, Domain reported.</p>
<p class="p2"><span>Suburbanite CEO Anna Porter, acknowledges insurance was a "grey area."</span> </p>
<p class="p2"><span>"Many are relying on landlord insurance to cover the lost rent if their tenant applies for a payment pause but every policy is different.</span><br><span> </span><br><span>“I urge you to absolutely speak with your insurance broker or insurance company directly and refer to your PDS,” she says.</span><br><span> </span><br><span>“On the ground, we’re seeing that many policies state a claim will only be paid if the tenant is evicted or terminated by the tribunal or they leave without notice and default on payments after vacating with no warning.”</span><br><span> </span><br><span>Generally, landlords will also need to be in a fixed lease period and follow the correct processes to be successful in a claim of this nature.</span><br><span> </span><br><span>“Like me, you’re probably thinking that the current COVID-19 economy doesn’t allow for eviction,” says Porter.</span><br><span> </span><br><span>“This issue is that if tenants can’t be evicted for falling into arrears then many landlords won’t be able to lean on the rental default provisions in their policies, assuming they even have a rental default in the policy.”</span><br><span> </span></p>
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Landlord insurance claim doubts not assisting COVID-19 eviction avoidance 

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<p>Catastrophic fires have, for over three months, escalated to unprecedented levels in Australia with many beholding the tragic loss of lives, property, wildlife and livelihoods.</p>
<p>Today, CEO of CoreLogic International, Lisa Claes released a statement concerning recent bushfires in Australia. </p>
<p>"Across the country, people are coming together to support those impacted by these terrible events and we are pleased to let you know that CoreLogic is also making a substantial contribution. We are not only donating to the Australian Red Cross and WIRES to support these efforts, but will also match all employee dollar donations for the bushfire appeal," Ms Claes assures.</p>
<p>"In addition, we would like to acknowledge the significant sacrifices being made by volunteer firefighters across multiple fire zones. As a consequence, CoreLogic employees who are members of the Rural Fire Services are being provided with paid volunteer leave to support their efforts. On top of that, we will also be working closely over the coming months with our community partner Habitat for Humanity Australia, providing employee volunteers to assist with recovery and property clean-up activities in the Cuddlee Creek community in South Australia, where over 85 homes have been lost.</p>
<p>"We have already established a Bushfire Response Team to accelerate a number of initiatives that will help customers impacted. That includes a program to help ensure that our customers (and their customers) receive the assistance they need at this difficult time. All our programs for <a href="https://www.corelogic.com.au/corelogic-australian-bushfire-support#banking" target="_blank"><span style="text-decoration: underline;">financial institutions</span></a>, <a href="https://www.corelogic.com.au/corelogic-australian-bushfire-support#insurance" target="_blank"><span style="text-decoration: underline;">insurance companies</span></a>, <a href="https://www.corelogic.com.au/corelogic-australian-bushfire-support#government" target="_blank"><span style="text-decoration: underline;">government agencies</span></a> and <a href="https://www.corelogic.com.au/corelogic-australian-bushfire-support#propertyowners" target="_blank"><span style="text-decoration: underline;">property owners</span></a> are outlined on this web page."</p>
<p>CoreLogic offer a free of charge on a one-time basis to financial institutions, insurers and property owners.</p>
<h2>Helping Financial Institutions</h2>
<p>CoreLogic can help identify customer properties that may have been impacted by the bushfires. They can also help find the property's recent estimated value, whether it was listed for sale or rent, and the estimated rebuild cost of the property.</p>
<h2>Helping Insurers</h2>
<p>CoreLogic can help identify customers whose properties may have been impacted which enables insurance organisations to reach out proactively to them and to priorities their inbound enquiries. </p>
<h2>Helping Government Agencies</h2>
<p><a href="https://www.corelogic.com.au/corelogic-australian-bushfire-support#contact_us_form" target="_blank">CoreLogic data</a> can help assist state and federal government agencies by identifying and providing information about those properties that may have been impacted. </p>
<p>They will help government agencies understand population displacement and dislocation, validate relief payment claims, provide economic impact analysis, assist with tax assessments for individuals, businesses or corporations, and identify longer-term health impacts.</p>
<h2>Helping Property Owners</h2>
<p>CoreLogic's can help simplify the task of estimating rebuild costs using their<a href="https://www.propertyobserver.com.au/https://sumsure.cordell.com.au/?_ga=2.200442925.244147514.1579496227-612828265.1579496227#/products/7/profiles/112" target="_blank"> Cordell Sum Sure Calculator</a>. This is an intuitive digital tool that uses CoreLogic property and construction data. It is available as a free-to-use service to help answer pressing concerns regarding bushfire related damagers.</p>
<p>Ms Claes suggests, "For more information regarding our bushfire response, please contact the CoreLogic Customer Call Centre on 1300 734 318, or your client account manager. Alternatively, use the form at the bottom of this page. We are ready to discuss how we can assist you." </p>
<p>Main photo from <a href="https://www.corelogic.com.au/corelogic-australian-bushfire-support#insurance%20owners" target="_blank">CoreLogic News</a></p>
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Response to Australia's bushfire crisis by CoreLogic

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<p>All hands on deck called for as the Insurance Council of Australia (ICA) opened an online register yesterday to help local tradespeople and builders play a significant role in rebuilding their regional communities. </p>
<p>Qualified and reputable builders and tradespeople who have the capacity to work on property repairs and rebuilds are encouraged to register their details at <a href="http://www.disasters.org.au" target="_blank">www.disasters.org.au</a>. </p>
<p>The register will collect key information including the town or region in which the builder or tradesperson operates, available skills and qualifications, and their key contact details. </p>
<p>The above information collected will then be publicly available for use by insurance companies to source additional tradespeople for property rebuilding and repairs. This information might also be used by residents, businesses and government agencies that are seeking reputable tradespeople for privately funded construction. </p>
<p>"Insurers are committed to using local trades and builders where feasible." ICA Head of Risk and Operations, Karl Sullivan says, "This register helps qualified and reputable building industry professionals nominate for work in their local area.</p>
<p>"Employing and contracting local professionals and suppliers during the rebuilding phase of bushfire recovery is an essential component in ensuring the economic viability of communities, including the preservation of jobs and supporting local businesses and service providers. Building professionals will still need to provide competitive quotes when contracting for work.</p>
<p>"Experience from recent natural disaster shows insurers predominantly use local trades for most rebuilding and repair works. For example, insurers employed more than 2000 local trades and builders and supported dozens of suppliers and service providers following last year's catastrophic floods in Townsville."</p>
<p><span>Main Photo © </span><a href="https://www.propertyobserver.com.au/https://www.geograph.ie/profile/2282" target="_blank" title="View profile">Kenneth Allen</a><span> (</span><a href="http://creativecommons.org/licenses/by-sa/2.0/" target="_blank">cc-by-sa/2.0</a><span>)</span> </p>
<p> </p>
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Local trades register to aid bushfire recovery launches, the Insurance Council of Australia

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<p>The Insurance Council of Australia (ICA) forecasts a sharp increase in catastrophe-related claims this week as household property assessments are undertaken and large commercial claims are lodged. </p>
<p><img src="https://www.urban.com.au/images/2020/1/15/2_NEWS_Total%20claims%20lodged.jpeg" alt="" width="245" height="223"></p>
<p>Source: <a href="https://disasters.org.au/current-catastrophes/2019/11/13/november-bushfires" target="_blank">Total claims lodged, ICA</a><a href="https://disasters.org.au/current-catastrophes/2019/11/13/november-bushfires" target="_blank">.</a></p>
<p>Insurers have received 13,750 bushfire catastrophe-related claims since November 8, 2019 with an estimated loss of $1.34 billion. </p>
<p><img src="https://www.urban.com.au/images/2020/1/15/2_NEWS_Est%20insured%20value.jpeg" alt="" width="241" height="213"></p>
<p>Source: <a href="https://disasters.org.au/current-catastrophes/2019/11/13/november-bushfires" target="_blank">Estimated Insured Value, ICA.</a></p>
<p>New South Wales has by far recorded the most claims since November making up 87 per cent of all catastrophe-related claims. Meanwhile, South Australia records 6 per cent, Victoria records 4 per cent and Queensland records 3 per cent. </p>
<p><img src="https://www.urban.com.au/images/2020/1/15/2_NEWS_Claims%20lodged%20by%20state.png" alt="" width="238" height="229"></p>
<p>Source: <a href="https://disasters.org.au/current-catastrophes/2019/11/13/november-bushfires" target="_blank">Claims Lodged by State, ICA.</a></p>
<p>The ICA calls for all hands on deck as it launches a local trades register to aid bushfire recovery. ICA Head of Risk and Operations, Karl Sullivan encourages traders and builders to register and urged residents to heed last week's warning from the Australian Securities and Investments Commission to be aware of unscrupulous tradespeople and repairers, or firms offering to assist them with insurance claims.</p>
<p>The Consumer Action Law Centre has also called for a crackdown on exploitative claims management services. </p>
<p>The ICA is hosting insurance hubs to assist customers in southern New South Wales. Disaster recovery specialists from the Insurance Council and insurance companies will assist policyholders with insurance questions and help with the insurance claim process. </p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/1/15/2_NEWS_events.jpg" alt="" width="485" height="192"></p>
<p>Venues are subject to change depending on capacity and availability.Hubs will also be established in bushfire zones in South Australia and Victoria in the next week.</p>
<p> </p>
<p>Main Photo: <a href="https://disasters.org.au/news/2020/1/3/the-insurance-process-key-steps" target="_blank">ICA </a></p>
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Insurance customer hubs open amid skyrocketing catastrophe-related claims, the Insurance Council of Australia (ICA)

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<p>From searching for the right property to applying for a <a href="https://www.canstar.com.au/home-loans/">home loan</a> and choosing your furniture schemes and <a href="https://www.urban.com.au/expert-insights/buying/how-to-decorate-your-first-apartment">decor</a>, there’s a lot to plan before moving into your new home. Insurance is another important consideration, as it can help provide a level of financial cover for the contents inside your apartment, or the building itself, in the event of a worst-case scenario.</p>

<p>Here’s a guide to understanding insurance cover for your apartment, and four things to keep in mind when considering a contents policy to suit your requirements.</p>

<h2><strong>What insurance is available for an apartment?</strong></h2>

<p>For most new apartments, financial protection for the building structure is generally managed through a strata insurance policy. This type of insurance generally does not often include cover for your possessions inside the apartment, which is where contents insurance becomes important to acquire.</p>

<p><em>1. Building - strata insurance</em></p>

<p>Strata insurance, also called body corporate insurance, covers the apartment building itself, together with common property and shared areas like pools, lifts, driveways, balconies and garages, as well as permanent fixtures inside the apartment, which may include shared water pipes, toilets, and built-in wardrobes.</p>

<p>Depending on the policy, you might also have coverage for public liability in the event someone (such as a tradesperson) is injured while on common property.</p>

<p>This building insurance is mandatory for strata title apartments and is therefore arranged and managed by the body corporate. The cost of the insurance is shared between all owners and included in your body corporate levies.</p>

<p><em>2. Contents insurance</em></p>

<p><a href="https://www.canstar.com.au/home-insurance/what-is-contents-insurance/">Contents insurance</a> provides some financial protection against damage, theft or loss of personal possessions in your home. It is designed to cover everything inside your apartment that’s not permanently fixed, meaning you may be able to use it to claim items such as carpets, curtains, light fittings and appliances, as well as personal possessions including furniture, jewellery, phones and laptops.</p>

<p>When <a href="http://www.canstar.com.au/home-insurance/">comparing insurance policies</a>, it is a good idea to look at factors such as claim limits and the natural events included (such as damage from power surges during storms) because insurance providers can have varying policy definitions, inclusions and exclusions.</p>

<p><strong>How much can contents insurance cost?</strong></p>

<p>The exact premium you pay on your contents insurance can depend on a range of factors – such as the location of your apartment and the value of the contents you need cover for – but to give you a ballpark estimate, here is the market average annual contents insurance premiums listed on Canstar’s database. </p>

<div class="rtecenter"><strong>CONTENTS INSURANCE PREMIUM STATISTICS</strong></div>

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			<div><strong>                    STATE                     </strong></div>
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			<div><strong>     AVERAGE ANNUAL MARKET PREMIUMS</strong></div>
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			<div>NORTH QLD</div>
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			<div>$756.49</div>
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<td class="rtecenter">
			<div>NSW</div>
			</td>
			<td class="rtecenter">
			<div>$409.59</div>
			</td>
		</tr>
<tr>
<td class="rtecenter">
			<div>QLD</div>
			</td>
			<td class="rtecenter">
			<div>$398.46</div>
			</td>
		</tr>
<tr>
<td class="rtecenter">
			<div>SA</div>
			</td>
			<td class="rtecenter">
			<div>$330.29</div>
			</td>
		</tr>
<tr>
<td class="rtecenter">
			<div>TAS</div>
			</td>
			<td class="rtecenter">
			<div>$303.24</div>
			</td>
		</tr>
<tr>
<td class="rtecenter">
			<div>WA</div>
			</td>
			<td class="rtecenter">
			<div>$383.61</div>
			</td>
		</tr>
</tbody>
</table>
<p><em>*Source: Canstar - 17/09/2019. Based on the average annual premium for general contents insurance policies rated in Canstar's September 2019 Home &amp; Contents Insurance Star Ratings for the sum insured of $50,000. North QLD is the portion of Queensland north of Rockhampton. QLD includes Rockhampton and all areas south. Market includes all rated products on Canstar’s database.</em></p>

<h2><strong>When should you take out contents insurance?</strong></h2>

<p>The stage where you become responsible for any damage to the property differs from state-to-state. Generally, the buyer becomes responsible for damage to the property either on the exchange of contracts or at settlement. </p>

<p>Another consideration is that the strata insurance might not cover internal fixtures, such as <a href="https://www.urban.com.au/guides/how-to-choose-the-right-flooring-for-your-off-the-plan-apartment">floorboards</a> or top-of-the-range light fittings. I would suggest confirming with your lawyer as to what is covered by your apartment's strata insurance and what you may require additional insurance for.</p>

<h2><strong>Insurance and your new apartment: 4 things to keep in mind</strong></h2>

<p>When <a href="https://www.urban.com.au/guides">buying an off-the-plan apartment</a>, you may be looking to protect your assets financially, but it’s important to bear in mind that not all insurance policies are created equal.</p>

<p>Here are four things to keep in mind when considering insurance for a new apartment:</p>

<p><em>1. Understand what your strata insurance covers</em></p>

<p>Check the specifics of what the strata insurance policy considers part of the building structure, common property, common areas and common contents. For example, some policies might cover hardwood flooring inside apartments but not timber laminate or carpet, which you may choose to cover in your contents insurance policy.</p>

<p><em>2. Comparing contents insurance policies</em></p>

<p>Different insurance providers have different policies, and premium prices will vary. Shopping around to compare the offers provided by contents insurance providers is a great way to find out which company's policy is best suited to your needs.</p>

<p>When comparing policies, it is also a good idea to check the extent of coverage offered, including the definitions for clauses including "accidental damage" and other defined events, like fire and theft. You could also check whether your cover extends to personal property, including smartphones and bicycles, when they are in use remotely from your home.</p>

<p>If you’re intending on making your new apartment an investment property, you may instead wish to consider landlord insurance, as contents cover might not apply to you in this situation.</p>

<p><em>3. Accurately valuing your possessions</em></p>

<p>When taking out contents insurance, your insurance provider will generally ask you to give an estimated total value for your possessions. If you would like cover for certain high-value items such as jewellery, computers or electric guitars, you may need to list each of them specifically, and check with your provider about the value they may payout if you need to claim. Documenting and taking a photo of the items and receipts could also assist in providing evidence of ownership in case you need to make a claim.</p>

<p><em>4. Home warranty insurance</em></p>

<p>Something extra to keep in mind for newly built or off-the-plan apartments, in particular, is <a href="https://www.qbcc.qld.gov.au/home-warranty-insurance/home-warranty-insurance-explained">home warranty insurance</a> which could be included as part of the building contract and is typically underwritten by the state government where the apartment is located. If you find any defects covered under the policy within a set period after development and you inform your body corporate immediately, you may be able to lodge a claim for breach of statutory warranty. Note that eligibility, timelines and deadlines for making claims may vary between different states and territories.</p>
</body></html>

Contents vs strata insurance: A guide to understanding the cover for your brand-new apartment

<html><body>
<p>EXPERT OBSERVER</p>
<p>What Australians can learn from rising home insurance premiums in New Zealand?</p>
<p>Australia and New Zealand have experienced significant natural disasters in recent years.</p>
<p>The floods in Queensland, earthquakes in Christchurch and Kaikoura as well as bushfires in South Australia highlight just how vulnerable residents can be to these massive unforeseen events and how much they reply on insurance to protect themselves, their properties and their belongings.</p>
<p>When you’re at the whim of Mother Nature, having an appropriate level of home and contents insurance is an absolute necessity.</p>
<p>Nevertheless, living in a hazard capital means insurance comes at an ever-increasing price. We only have to look to Wellington as an example to see how recent regulatory change (following amends to the Earthquake Commission Act) and a more granular approach to risk management have seen insurers re-evaluate the risks they are taking on.</p>
<p>As a consequence, premiums have been steadily rising and this presents a raft of challenges for homeowners across the region. The following synopsis of the changing face of insurance in Wellington could be of interest to you as a fellow Tasman resident, and give an insight into what happens when a market moves from generalised to granular risk based pricing.</p>
<p>As well as being a participant in the sector in my role as insurance commentator for Australian and New Zealand, and leading the NZ insurance business, I’m also a home owner and therefore insurance customer, so I’ve seen firsthand the steady rise in premiums in the past few years. Whilst insurance has always been risk based, the level of granularity of the risk assessment is rapidly changing.</p>
<p>Go back a few years, and risk was assessed using Cresta Zones - large areas made up of adjacent postcodes. But this meant that your risk was assessed the same regardless of whether you were on the side of a hill in Wadestown or on the flat in Tawa.</p>
<p>Tower got the ball rolling with its per property risk-based pricing in April 2018, and last month IAG followed suit.</p>
<p>Whilst the effects of these changes won’t be felt fully for some time yet, until higher renewals start hitting the letterboxes or people move and seek new policies, the media were certainly quick to pick up on disgruntled Tower customers and report the odd extremes where premiums had shot up by tens of thousands for particularly "risky" properties. Whilst examples of $ 12,000, or greater, increases were thrown around, Tower were quick to respond that only 1% of their premiums were rising by more than $ 2,000 per annum.</p>
<p>However, according to Stats NZ household spending on property related insurance has risen from an average of $ 15 a week in 2008 to $ 34 a week in 2018. With the rises in the EQC and Fire Service Levy this year pushing this up this year, but there is no doubt that this will rise again as more risk based premiums come into effect Across other insurers.</p>
<p>In March, IAG hit the headlines, announcing that it would take a "conservative approach to writing new business in Wellington due to the high earthquake risk in that part of the country". This so alarmed Wellington Mayor, Justin Lester that he called for more regulation and an Insurance Forum, saying that insurers have a social responsibility to provide insurance cover that is affordable for all. He also referred to the ACC model and implied we should look at a state run insurance model for property. Maybe we could call it "State Insurance".</p>
<p>Oh. . . wait. I understand the Mayor's concerns, but do insurers have a social responsibility? New Zealand is unique in that it has EQC – a government backed insurer of the first $ 150K of natural hazard damage for any property that holds a domestic policy with Fire Cover.</p>
<p>EQC holds a socially responsible position - for example they decided to run the Canterbury Earthquake response as a centrally managed repair as they believed the social outcome would be better than making cash payouts with the associated risk of price gouging and a free for all for builders.</p>
<p>EQC also charges the same levy for any dwelling anywhere in the country. Private insurers are in a different boat, however. They aren’t subject to a government guarantee and have a corporate responsibility to be financially prudent in their risk appetite and the financial return on that risk.</p>
<p>Whilst insurers do want to provide cover to Kiwis, it's entirely logical to take account of the likely risk at an individual property level. They also have to buy reinsurance on the global market which certainly doesn’t view insurance as a social responsibility – they exist to price and cover risk in return for premiums.</p>
<p>That means that Wellingtonians will begin to pay higher premiums commensurate to the actual level of risk they face. A compounding effect is that insurers also have to hold additional capital reserves or reinsurance to cover the costs of a 1 in 1,000 year event for property within 50km of the Beehive.</p>
<p>Whilst not a new requirement, that's still very real cost of doing business in Wellington, especially with building costs rising by nearly 5% per annum according to the Cordell CHIP Report. It’s not just Wellington, though. It also means that other parts of the country that face risks such as regular flooding, with all indications that the severity and frequency are increasing with climate change, or are on the coast with the increased risk of erosion from storm surge, will also attract higher premiums. In order to retain cover, insurers may opt to provide higher excess for specific events, or exclude them altogether.</p>
<p>If your house has flooded three times in four years, why would any sane business continue to offer cover for future flood events? Even councils are stepping away from commitments to protect homes against the rising tide of climate change and coastal erosion.</p>
<p>Recently the Mayor of Kapiti indicated that they only had a limited responsibility to help over 1,800 coastal homeowners and ultimately they were on their own, commenting on the general costs of coastal protection: "How long can we mount a defence, how much will it cost and who pays? These are the challenging questions now and especially into the future."</p>
<p> A similar story in the Taranaki where the council won't extend a seawall protecting several homes. Climate change is estimated to bring more severe storm surge events which will further cause issues over insurance cover for coastal properties and many coastal owners may find their stunning beachfront views uninsurable.</p>
<p>Whilst insurers try and operate with social responsibility, they also have financial responsibility as well. As I pointed out to a colleague – would you be happy if your bank was making poor lending decisions that might impact on the amount you pay for your mortgage and the stability of your lender should those loans go bad? Sure, insurers are in the business of covering risk, but like any business they have to ensure they have a sustainable balance between risk and reward.</p>
<p>Aucklanders, of course, may see the benefits of this southwards shift in risk pricing with improved premiums. A friend up there recently switched to a risk based insurer and saved over $ 1,500 in their annual premium for the same cover with the same excess.</p>
<p>So, what does this mean for Kiwis?</p>
<p>Firstly, premiums will continue to rise – that’s a certainty – especially in higher risk areas. Let’s stop trying to be King Canute against the rising tide of higher risk and climate change. Secondly, buyers should consider insurance early on in the home buying process. When you’ve been to an open home and have fallen in love with a house, check out how much insurance cover will be. Jump on an insurer’s website and use CoreLogic’s Cordell Sum Sure to estimate the rebuild cost and get a quote for cover.</p>
<p>Get two or three quotes for comparison. Look at the highest premium and assume that all premiums will rise to that level in the next few years, so factor that in to your budget, along with increasing interest rates. If a property is returning a high premium, but you still want to make it your home, maybe factor the future cost of insurance in to your offer? And definitely make that offer conditional on satisfactory insurance and don’t leave it to the last minute.</p>
<p>Another emerging effect of these changes is that lenders are beginning to consider how these changes might affect them and their risk. If they have a 25 year relationship with the home owner, but the insurer only has a 12 month commitment. Rising premiums and a possible retreat from cover in some areas could certainly affect lenders.</p>
<p>The other question is, how will these changes affect Australia?</p>
<p>Whilst there is certainly a level of risk based pricing here, climate change, which is likely to result in more storms further south, increased storm surge, resulting in more flooding will certainly affect how insurers price risk and what they are prepared to cover.</p>
<p>Added to that, many insurers and brokers operate trans-Tasman and so are clearly impacted by changes across the ditch. That aside, now is as good a time as any to review your cover whichever side of the Tasman you live on, and make sure you’re getting value for money across your home and contents insurance.  </p>
<p><span style="font-size: 12.16px;">RICHARD DEAKIN is the CoreLogic Head of Insurance</span></p>
<p>What Australians can learn from rising home insurance premiums in New Zealand? Richard Deakin, CoreLogic Head of Insurance comments: Australia and New Zealand have experienced significant natural disasters in recent years. The floods in Queensland, earthquakes in Christchurch and Kaikoura as well as bushfires in South Australia highlight just how vulnerable residents can be to these massive unforeseen events and how much they reply on insurance to protect themselves, their properties and their belongings. When you’re at the whim of Mother Nature, having an appropriate level of home and contents insurance is an absolute necessity. Nevertheless, living in a hazard capital means insurance comes at an ever-increasing price. We only have to look to Wellington as an example to see how recent regulatory change (following amends to the Earthquake Commission Act) and a more granular approach to risk management have seen insurers re-evaluate the risks they are taking on. As a consequence, premiums have been steadily rising and this presents a raft of challenges for homeowners across the region. The following synopsis of the changing face of insurance in Wellington could be of interest to you as a fellow Tasman resident, and give an insight into what happens when a market moves from generalised to granular risk based pricing. As well as being a participant in the sector in my role as insurance commentator for Australian and New Zealand, and leading the NZ insurance business, I’m also a home owner and therefore insurance customer, so I’ve seen firsthand the steady rise in premiums in the past few years. Whilst insurance has always been risk based, the level of granularity of the risk assessment is rapidly changing. Go back a few years, and risk was assessed using Cresta Zones - large areas made up of adjacent postcodes. But this meant that your risk was assessed the same regardless of whether you were on the side of a hill in Wadestown or on the flat in Tawa. Tower got the ball rolling with its per property risk-based pricing in April 2018, and last month IAG followed suit. Whilst the effects of these changes won’t be felt fully for some time yet, until higher renewals start hitting the letterboxes or people move and seek new policies, the media were certainly quick to pick up on disgruntled Tower customers and report the odd extremes where premiums had shot up by tens of thousands for particularly "risky" properties. Whilst examples of $ 12,000, or greater, increases were thrown around, Tower were quick to respond that only 1% of their premiums were rising by more than $ 2,000 per annum. However, according to Stats NZ household spending on property related insurance has risen from an average of $ 15 a week in 2008 to $ 34 a week in 2018. With the rises in the EQC and Fire Service Levy this year pushing this up this year, but there is no doubt that this will rise again as more risk based premiums come into effect Across other insurers. In March, IAG hit the headlines, announcing that it would take a "conservative approach to writing new business in Wellington due to the high earthquake risk in that part of the country". This so alarmed Wellington Mayor, Justin Lester that he called for more regulation and an Insurance Forum, saying that insurers have a social responsibility to provide insurance cover that is affordable for all. He also referred to the ACC model and implied we should look at a state run insurance model for property. Maybe we could call it "State Insurance". Oh. . . wait. I understand the Mayor's concerns, but do insurers have a social responsibility? New Zealand is unique in that it has EQC – a government backed insurer of the first $ 150K of natural hazard damage for any property that holds a domestic policy with Fire Cover. EQC holds a socially responsible position - for example they decided to run the Canterbury Earthquake response as a centrally managed repair as they believed the social outcome would be better than making cash payouts with the associated risk of price gouging and a free for all for builders. EQC also charges the same levy for any dwelling anywhere in the country. Private insurers are in a different boat, however. They aren’t subject to a government guarantee and have a corporate responsibility to be financially prudent in their risk appetite and the financial return on that risk. Whilst insurers do want to provide cover to Kiwis, it's entirely logical to take account of the likely risk at an individual property level. They also have to buy reinsurance on the global market which certainly doesn’t view insurance as a social responsibility – they exist to price and cover risk in return for premiums. That means that Wellingtonians will begin to pay higher premiums commensurate to the actual level of risk they face. A compounding effect is that insurers also have to hold additional capital reserves or reinsurance to cover the costs of a 1 in 1,000 year event for property within 50km of the Beehive. Whilst not a new requirement, that's still very real cost of doing business in Wellington, especially with building costs rising by nearly 5% per annum according to the Cordell CHIP Report. It’s not just Wellington, though. It also means that other parts of the country that face risks such as regular flooding, with all indications that the severity and frequency are increasing with climate change, or are on the coast with the increased risk of erosion from storm surge, will also attract higher premiums. In order to retain cover, insurers may opt to provide higher excess for specific events, or exclude them altogether. If your house has flooded three times in four years, why would any sane business continue to offer cover for future flood events? Even councils are stepping away from commitments to protect homes against the rising tide of climate change and coastal erosion. Recently the Mayor of Kapiti indicated that they only had a limited responsibility to help over 1,800 coastal homeowners and ultimately they were on their own, commenting on the general costs of coastal protection: "How long can we mount a defence, how much will it cost and who pays? These are the challenging questions now and especially into the future. " A similar story in the Taranaki where the council won't extend a seawall protecting several homes. Climate change is estimated to bring more severe storm surge events which will further cause issues over insurance cover for coastal properties and many coastal owners may find their stunning beachfront views uninsurable. Whilst insurers try and operate with social responsibility, they also have financial responsibility as well. As I pointed out to a colleague – would you be happy if your bank was making poor lending decisions that might impact on the amount you pay for your mortgage and the stability of your lender should those loans go bad? Sure, insurers are in the business of covering risk, but like any business they have to ensure they have a sustainable balance between risk and reward. Aucklanders, of course, may see the benefits of this southwards shift in risk pricing with improved premiums. A friend up there recently switched to a risk based insurer and saved over $ 1,500 in their annual premium for the same cover with the same excess. So, what does this mean for Kiwis? Firstly, premiums will continue to rise – that’s a certainty – especially in higher risk areas. Let’s stop trying to be King Canute against the rising tide of higher risk and climate change. Secondly, buyers should consider insurance early on in the home buying process. When you’ve been to an open home and have fallen in love with a house, check out how much insurance cover will be. Jump on an insurer’s website and use CoreLogic’s Cordell Sum Sure to estimate the rebuild cost and get a quote for cover. Get two or three quotes for comparison. Look at the highest premium and assume that all premiums will rise to that level in the next few years, so factor that in to your budget, along with increasing interest rates. If a property is returning a high premium, but you still want to make it your home, maybe factor the future cost of insurance in to your offer? And definitely make that offer conditional on satisfactory insurance and don’t leave it to the last minute. Another emerging effect of these changes is that lenders are beginning to consider how these changes might affect them and their risk. If they have a 25 year relationship with the home owner, but the insurer only has a 12 month commitment. Rising premiums and a possible retreat from cover in some areas could certainly affect lenders. The other question is, how will these changes affect Australia? Whilst there is certainly a level of risk based pricing here, climate change, which is likely to result in more storms further south, increased storm surge, resulting in more flooding will certainly affect how insurers price risk and what they are prepared to cover. Added to that, many insurers and brokers operate trans-Tasman and so are clearly impacted by changes across the ditch. That aside, now is as good a time as any to review your cover whichever side of the Tasman you live on, and make sure you’re getting value for money across your home and contents insurance.</p>
</body></html>

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