Strata insurance setback in Douglas
On the backburner
Peak property body Strata Community Association (Qld) (SCA (Qld)) has expressed significant disappointment in the news that the savings from the Northern Australian Reinsurance Pool will not hit consumer insurance policies until potentially as late as the end of the year.
The reinsurance pool is backed by a $10 billion annually reinstated Commonwealth guarantee and will be administered by the Australian Reinsurance Pool Corporation and was promised to come into effect from 1 July 2022.
To put it in housing terms, it’s like the people putting this scheme together were building you a home and promised faithfully they would construct it in a certain time frame but now say it’s going to take a further 6 months because they haven’t been able to get their act together.
One could be forgiving for asking why they didn’t know that when heralding the July 1 date?
Complex business
Reinsurance is a highly complex global business. It’s insurance for insurance companies to offset their risk. It helps mitigate the blow of high-cost claims and protect their bottom-line.
Homeowners in Northern Australia with the most acute cost pressures were expected to benefit from up to 46 per cent premium discounts, strata properties up to a 58 per cent discount and small to medium enterprises up to a 34 per cent discount. Some 880,000 were expected to be eligible to be covered by the reinsurance pool for the risk of cyclone and related flood damage.
Governments need to work together
SCA (Qld) Senior-Vice President Chris Irons urged all tiers of Government to work as quickly as possible to give urgent cost of living relief to North Queensland strata owners. The Northern Australian Reinsurance Pool has been shunted back to the end of year, a decision that has strata owners in North Queensland reeling, including Port Douglas. Mr Irons says “At a time when cost of living is spiralling out of control, we are tremendously saddened to see that the relief promised by this program will not be available as soon as we believed”.
Port property owners unhappy
Greg and Mavie Pearce at Craiglie are typical of strata property owners who are disappointed by this news. “The biggest component of our strata fees is insurance and for the reinsurance pool not to go through next month is extremely disappointing,” said 66-year-old Mavie. Husband Greg, also 66, told Newsport “I’ve worked all my life and paid my taxes, as have other self-funded retirees, and just when we’re getting something back with this strata reinsurance scheme, it’s taken away from us, even if it’s supposedly for six months or so” he said.
Strata owners hit by endless premium rises well above inflation had an end in sight to this cost-of-living pain. Now they must try to manage the cost of this delay plus additional high levels of central price inflation on everyday goods plus interest rate hikes by the Reserve Bank.
SCA (Qld) say they will work with the new Minister, Assistant Treasurer Stephen Jones to deliver this important program. According to Mr Irons there is scope for the State Government to provide temporary relief through taxation changes, “with Labor holding office at both the State and Federal level now, I hope that a new spirit of cooperation can be leveraged to solve this ongoing crisis” he said.
Warren Entsch says it should be delivered on time.
Newly re-elected Member for Leichhardt Warren Entsch, who backed the scheme and worked tirelessly to have it implemented, told Newsport he is very disappointed. “The legislation was locked in and now it worries me that the new Federal Government is being led by the nose by the insurance companies, who have been fighting this all along” he said. Mr Entsch told Newsport there is no reason he can see, why this program can’t be delivered on time on July 1.
Meanwhile Mr Irons says the problems in Northern Queensland can only be solved by collaboration and cooperation. “I urge local councils, the state and federal governments to work together on tax changes and mitigation funding for strata, to help ensure that North Queensland remains a vibrant and affordable place to live, work and raise a family” he said.
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