Strata insurance stings now, but there are things you can do to ease the squeeze. Photo: Michelle Kroll.
Strata insurance has become one of the biggest pressure points for owners’ corporations, with premiums climbing and cover options narrowing. However, there are steps owners can take now to avoid paying more than they should — and to prevent a costly claim from being denied.
Civium National Insurance Manager Zoe Swift says many building owners corporations leave themselves vulnerable by neglecting routine maintenance or failing to utilise their sinking fund for major replacements, often leading to leaks due to age and deterioration.
“Outstanding maintenance issues are one of the biggest factors leading to higher premiums, reduced cover options and failed claims,” she says.
“It’s important to be on top of planned preventative maintenance — regular gutter cleans, fire asset services, plumbing. Insurers may look for evidence of this when assessing your risk profile.”
Insurance is about accidental loss or damage from an unforeseeable event.
Because strata policies are exclusions-based, damage from wear and tear, old age, or gradual deterioration is typically not covered. In other words, unless owners’ corporations can show an event was sudden and unavoidable, the insurer has an easy out.
“If we can prove you regularly maintain your property, and this was an unexpected event that could not have been reasonably prevented, that’s when we can advocate on your behalf,” Zoe says.
“But it is on you or your owners’ corporation to maintain and fix known issues in the first place.”
Zoe says the most effective antidote is budgeting.
“Reviewing your budget adequately for ongoing maintenance means you can be proactive rather than reactive,” she says.
“Making it a budgetary line item not only keeps you on top of it, but also helps avoid special levies.
“Also, locking in 12-month preventative maintenance contracts with trades can stabilise costs.”
Civium National Insurance Manager Zoe Swift says preventative maintenance is key to keeping premiums down. Photo: Civium.
Even with proper planning, navigating the insurance market can be challenging. That’s where strata managers can make a tangible difference.
If in doubt about your options, it’s worth reaching out to your strata manager.
“They understand the market and your building and can often get you a better result,” Zoe says.
Civium, for example, operates an in-house insurance team that assists owners’ corporations in liaising with brokers and insurers.
As they are not brokers, there are restrictions on what they can do for you, but they are a good starting point.
“Think of us as someone who can relay information in a way you can relate — not in broker lingo,” Ms Swift says.
That support doesn’t stop at helping to secure a good policy.
“When a claim comes through, we review it and ensure first that it’s a claimable event. If there’s any doubt, we liaise with the broker for their professional opinion, because the last thing you want is a declined claim,” Zoe says.
“We will set that expectation from the start and help you gather all the information favourable for the outcome we’re trying to achieve. However, everything must be disclosed, and you must bear in mind that often, this isn’t in the owner’s favour. That’s why our overall recommendation is to spend money to save money.
“A declined claim will still drive your premium up. But if a claim is denied unfairly, we’ll advocate for our client and go down the internal dispute resolution path with insurers on their behalf.”
With offices in Canberra, Sydney, Melbourne and Brisbane, Civium’s national scale can help secure sharper deals — especially for complex buildings or those battling expensive policies. Civium has seen premiums drop substantially when they’ve leveraged national networks to negotiate.
“But your first and best line of defence against inflated premiums is to stay ahead on maintenance, utilise your sinking fund for capital works such as balcony or roof replacements to reduce water egress events and lean on your strata managers when needed,” Zoe says.
For more information, contact Civium.
