Pressure by strata title unit owners to force a review of soaring insurance premiums has forced a parliamentary inquiry submission period to be extended by two weeks.

A House of Representatives Standing Committee on Social Policy and Legal Affairs meeting at Port Douglas Community Centre on Monday attracted up to 100 unit and strata title property representatives.

Stories were heard from body corporate representatives, unit owners and building managers about how strata title insurance premiums had risen by between 300% and 1000% since 2005.

Sue Chapman, building manager and unit owner at Verandahs Boutique Apartments in Port Douglas, says her building’s premiums have risen 375% from $5500 in 2005 to a quote of $21,000 for 2012.

Another Port Douglas accommodation house reported an increase from $35,000 to $105,000 per annum.

“Our premiums at Verandahs actually went down slightly in 2008, but in they rose again to $7700 in 2009, another 70% increase in 2010 to $13,400 and another 40% increase in 2011,” Sue said.

“We’ve just got an appraisal in for $21,000 for 2012 - the insurance companies are saying they previously undervalued the risk.

“We’re the same risk as five years ago…we’re in the same location, we haven’t moved, so how can the risk now be higher?”

On trying to find better deals for her building, an insurance broker reported back to Sue that only one insurance company was now willing to cover Far North Queensland.

Unit owners and body corporates now face a situation where insurance premiums are so high that budgets for pool cleaning, gardening and general maintenance have been eaten into, which could force down the value of their investment.

“This will affect the saleability of their properties – and if owners are feeling the pinch financially, they will be forced to put their properties on the market,” Sue said.

The Unit Owners Association of Queensland called for an immediate 12-month suspension of premium increases on residential strata properties until the issue was resolved.

Member for Leichhardt, Warren Entsch, who was at Monday’s Port Douglas meeting, said it was “disgusting” that insurance companies and the Insurance Council believed there wasn’t a major problem.

 “They say there is no problem across the board nationally, and still believe there is good competition in the marketplace,” Mr Entsch told The Newsport.

 “We’ve got governments of all levels trying to push people into strata title developments, due to their low impact footprint.

 “If we’re putting people into strata living, it’s got to be affordable – these are not wealthy investors, a lot are retirees wanting to live the dream.

 “That dream is being eroded.”

Mr Entsch also believed disproportionate council rates for local strata title owners also needed to be addressed by council candidates currently campaigning for the upcoming local government elections.

 “Unit owners in Canberra have a third of the cost of council rates compared to here, Brisbane has half the cost…something is not right,” he said.

 Mr Entsch said around 400 submissions had already been received by the commission into the insurance inquiry, but urged for more submissions during the extra two weeks extension.

Submissions can be made to spla.reps@aph.gov.au with recommendations due out in April.

Sue also urged more unit owners and body corporates to speak up.

 “Obviously the more submissions received can only further endorse the concerns and impacts of steep hikes in insurance premiums for strata buildings,” Sue said.

 See related stories: <link have-your-say-on-strata-insurance-newspo.6808.0.html>www.tourismportdouglas.com.au/Have-your-say-on-strata-insurance-NEWSPO.6808.0.html

 <link insurance-deals-hurting-home-owners.5395.0.html>www.tourismportdouglas.com.au/Insurance-deals-hurting-home-owners.5395.0.html

Missed a story? Check out our extensive News Archive.