Strata insurance premiums have been underpriced in the past, a report by the Australian Government Actuary has found.
The report into the price of strata title insurance in North Queensland was release on Friday in response to the federal government's request for investigation into insurance price rises, and shows that current pricing is a more accurate reflection of the cost to insure.
Colin Archer, managing director at Archers Body Corporate Management, said the outcome of this report was disappointing for unit owners in North Queensland.
“The increase in the price of insurance in the North Queensland region has been devastating for unit owners,” Mr Archer said.
“Owners were looking for answers within this report and looking for the insurance companies to step up and take responsibility.
“Unit owners are effectively being told they are being penalised for historical under-pricing and a lack of price sophistication from insurers.
The report concluded that the historical under-pricing could be linked insurer’s attempts to aggressively gain market share – at the expense of the strata community.
“Archers will continue to provide support for unit owners affected by price increases through our body corporate services and also the educational forums we regularly hold in the region,” Mr Archer said.
“Now is the time for unit owners and bodies corporate to be diligent about this issue.”
Strata insurance in North Queensland will be examined at the next meeting of the Insurance Reform Advisory Group.
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