As members of the Body Corporate Committee for a block of 11 condo units in Cairns, John and Stephen wrote to Sure Insurance to tell us about their experience organising Residential Strata Insurance for this property. Here’s what they had to say:

“Personally I owned and operated a number of blocks of flats here in Cairns over the years and found Sean at Lords Insurance was always fair and patient and pleasant to deal with.

So when I became an owner of a Body Corp property as an owner/resident, I felt the costs of the Body Corp and quickly got involved with the committee.

As a consequence of joining the committee, we have been desperately looking for ways to save our owners. Naturally, we want to improve our costs as rising Body Corporate costs spoil the resale values of our properties and kill the returns for investors.

We obtained cover for this property with Lords and were insured in the 2018-19 year with Resilium; the cost was around $12,000 and we were very happy with their service. However, we were shocked when we received the news that for the year 2019-20, only three or four companies would actually quote us and Resilium was now no longer interested in even quoting. All this was explained by the heavy losses to insurers in the Townsville event.

We worked with Lords and discovered one of the four insurers would not even quote it due to a trivial claim made by our Body Corporate manager. The other three insurers gave price indications that were eye-watering and way out of our reach. Our broker had some discussions with SURE Insurance and I guess he persuaded them to at least quote, as I think we manage this property as well as we can.

I should explain the price indications I use here are our costs, and I assume they include ‘commissions/margins” for our broker, Lords.

Our first indicative price from our broker was over $32,000 – but in the interest of providing the best outcome for us – Sure Insurance asked our broker to provide further information about maintenance and resilience. We learned that if the property is well maintained and if we make some effort, Sure was happy to find ways to reduce the premium. This showed that this insurance company was a bit different to the others – and we were very happy to listen carefully to their ideas.

We provided our latest “Fire/Building and Pool safety” report and as it was good, they gave us a nice discount on the original quote.

Lords explained that further savings could be made if we completed a free JCU Cyclone Resilience Report. The building inspector, arranged by JCU, came and did a very thorough examination of the complex including the roof cavity. The report showed that we were in pretty good shape to withstand the effects of a cyclone – the report was sent via Lords to SURE.

However, there was one issue mentioned; some 8-12 very large palms in the neighbouring Strata Block that were seen as a risk and suggested as a possible issue. Luckily for us, when we contacted the Committee for the neighbouring block, we were able to show them that it would be most beneficial for them (and us) if these trees were removed as this would reduce the burden on the garden maintenance costs. Removal was going to be a big job, luckily the committee on this neighbouring property were also worried about them, and I suppose our efforts moved them to understand their own insurance costs this year. They agreed to arrange for the removal and we sent photos of the removal process and sent the pictures to Sure Insurance via Lords Insurance. Within a day or so, we were granted a further discount on our policy cost. This was great and showed that they would help us if we helped them manage the risk.

We were also worried about a cause in the new policy that referred to the leaking of water. This was explained as leaking from flexible hoses in each of the units. We were told that if we arranged a ‘plumbing audit’ that showed all hoses connected to the likes of washing machines and dishwashers were new or in good order, we could expect savings and this would reduce the EXCESS on this item greatly. It was a bit of a chore to arrange all the residents to make these inspections possible – however, we did it and a few days later we had a further reduction. At the end with a little effort, we saved over $10,000 of our policy costs and reduced the excess on this water leaking issue.

Our Lords Insurance broker had told us Sure Insurance is different and that they look for ways to save. It is great to have a new insurer entering the market – one with a fresh perspective who will try to give their customers a fair go!”

In June, Sure posted a simple Facebook quote from Diana, a Sure Strata Customer which summed up many of our customer compliments we receive for both home & strata insurance, “Thank you for bringing affordable insurance to the North. I am extremely grateful.”

The post received a number of comments, as you do with Facebook, referrals to friends, good comments, silly comments and of course some negative comments. Some are simply untrue and don’t warrant a response, but on this occasion, Carol from Bowen added: “Definitely not the experience of the Body Corporate we manage”.

Going on to say, “just adding we have had a $7,000 increase on the last years premium, as well as an excess of $24,000 for cyclone damage, plus an extra $1,000 making it $2,000 for any claim. Call that keeping things affordable, I don’t think so. We’ve yet to see if what the Gov. are proposing will make any difference.”

Adding, “That is with Sure insurance and strata insurance being compulsory and no other insurance company available in Nth QLD they have you where they want you. All I can say is brace yourself for the shock.”

Given that majority of our renewals have in fact gone down in price, we were somewhat confused by the comment, and definitely not the experience we want Sure Customers to have. I asked Carol to contact me to discuss, which she did.

We quickly established that Sure had not put their premium up, rather as a result of their previous insurer exiting the market, the premium for New Business was around $20,000 compared to $13,000 with the other insurer. Even though it wasn’t a Sure increase, this didn’t help Carol and her lot owners.

We pulled up her file and started to look into what was driving the premium up. Starting at Cyclone mitigation, based on her comment of the high cyclone excess.

The first thing that stuck me was the year of construction looked wrong. It was written down as 1983 but looked a lot newer. Year of construction is important to insurers based on the various building codes and standards, particularly with Cyclone standards of roofs.

We corrected that and the premium reduced. We then discussed the pitch and condition of the roof. It was noted as a flat roof, where in fact it was a low pitch roof, again a cyclone and storm premium factor.

The roof had also been damaged back in 2017 with Cyclone Debbie and a large proportion of the roof was affected. Now some people may think that is a bad thing for insurers and will drive up premium, Sure views this differently. We talked through the extent of the repairs and the roof was repaired to 2017 standards, making it more resilient and again, the premium was again reduced.

Carol explained how the Committee had been very proactive in focusing in on mitigation improvements. Upgrading fence work, replacing a wooden gazebo by the pool with cyclone resilient umbrella, overhanging trees removed, to name but a few. All of which made a difference to their premium.

I then recommended a JCU resilience report. Carol had not heard of the program. The North Queensland Strata Inspection Program (NQSTIP) is funded by the Australian Federal Government, administered by the Queensland Government, and independently developed and implemented by the James Cook University.

The NQSTIP offers free property inspection reports and provide estimates of the current resilience of strata properties against future cyclone damage along with recommendations, where appropriate, for maintenance, upgrades or changes to enhance resilience. Sure Insurance utilises the voluntary NQSTIP reports to reward Proactive Body Corporates who have invested in property resilience with lower premiums.

Where the premium started out around $20,000, following the conversation around the roof, the premium fell to $15,100. Then taking into account the fence, pool gazebo, tree removal, other mitigation measures and finally the James Cook Uni Cyclone Resilience Report, the premium dropped to $11,606 including government taxes.

What can we learn from the Beachfront example?

Sure Insurance genuinely looks for ways to save. However, we can only do this based on the information that is provided. This is why we recommend Sure Insurance Authorised Brokers, licenced to provide the right insurance advice and trained in the ‘Sure way’ to reward proactive Body Corporates who invest in mitigation and ongoing maintenance programs.