Reducing Queensland cyclone insurance premiums: Independent strata study
Strata-title properties in tropical Queensland should undergo regular engineering inspections to ensure they are resistant to extreme weather events, according to an independent study by James Cook University's Cyclone Testing Station.
A three month study, commissioned by the Insurance Council of Australia (ICA) was developed to focus on assisting strata owners in Far North Queensland, and analysed policies active in 2010 and 2011, as well as claims associated with Cyclone Yasi.
Recommendations of the study included engineering-based inspections every seven to 10 years, awareness development around appropriate maintenance (including well-maintained cladding, additional bolts and locks, etc) and a new study about water ingress from wind driven rain.
ICA CEO, Rob Whelan, said that the study found the age of a property had less influence than other factors, when looking at the impact of a cyclone on a building.
Surprisingly, water ingress from wind-driven rain and the compounding effect that damage from items such as television aerials and fences could have, were seen to be more damaging.
“The combination of high winds and driving rains typical of cyclones mean that water can find its way through doors and windows, while damage to a TV aerial or to guttering can leave a roof exposed to water and further damage to the interior of a property,” Whelan said.
More than 80% of analysed claims saw some damage due to water ingress. Multi-storey buildings were seen to have a higher incidence of claims, and higher costs, than low-rise.
Where the risks of cyclones are higher, this is generally reflected in higher insurance premiums, said Whelan.
“However, the ICA and the insurance industry are committed to working with governments and communities to reduce these risks where possible," he said.
In the past 20 years, the ICA has declared 12 cyclones as catastrophes, with these causing combined insured losses of $2.32 billion. The biggest event, Cyclone Yasi in 2011, caused $1.4 billion in insurance losses. Damage caused by ex-Cyclone Oswald in 2013 caused a further $1.1 billion in losses in Queensland and New South Wales.