RECOVERING FROM THE END OF 2023
January 11, 2024
Well, 2023 was certainly a year of extremes and it is no surprise that it came to a close with a Tropical cyclone in Cairns, severe thunderstorms, declared a tornado, on the Gold Coast as a Christmas present and severe thunderstorms which threatened to dampen New Years Eve celebrations on the Sunshine Coast.
The Queensland government has released specific grants relating to the Cairns and Gold Coast events. Queenslanders impacted by Jasper and the Christmas day fiasco in the affected areas, can apply for grants for; hardship experienced for loss of essentials, loss attributed to being without electricity or gas for more than 5 days, loss of household contents, to ensure safe reconnection of essential services and a structural assistance grant. The structural assistance grant is up to $50,000 per household. The other grant amounts are modest and will unlikely be available to most in the community as income thresholds and either being uninsured or uninsurable form part of the eligibility criteria. The exceptions are the emergency hardship grant for those in impacted areas $180 per person or $900 for a family of 5 or more for essentials and the hardship attributed to being without power for more than 5 days being $150 per person or $700 for a family.
Even though emergency funds being immediately available for those most vulnerable in our communities is a good thing, $330 per person is unlikely to go far for the average punter.
For those in strata titled community living, building and common property insurance is mandatory pursuant to the legislation, unless the Body Corporate Commissioner provides an order for insurance at a lower level in specific circumstances.
Insurance premiums for strata buildings are calculated using a replacement costs estimate report [RCE], required every 5 years, however, many insurers are requiring them every 3 years. A qualified accountant with specific strata knowledge will work with your body corporate manager, in conjunction with a sinking fund forecast [SFF] (which determines what improvement works are required in the next 1-5 years) to determine the cost of replacing the building, what maintenance and improvements will be required which is in turn used to determine levies. Insurers then assess the premium and deductible in light of this, location in relation to historical weather events, claims history and other considerations unique to the scheme, such as is a tattoo parlour operating in a commercial lot. In the last decade we have seen an increase in frequency and severity of weather events resulting in rising premiums in a significant way.
The Commissioner for Body Corporate and Community Management recently released an update demystifying insurance excess and who pays the excess on an insurance claim, which is an issue the BCCCM is often called upon to determine. You can find out who is responsible HERE.
So what can you do?
As a committee, work with your body corporate manager to ensure:
- Your RCE and SFF are up to date, raise appropriate levies in both the Administration and Sinking funds to allow for responsible maintenance and improvements of the building and common areas;
- Don’t kick the can down the road when it comes to maintenance. Key reason is that if recommended rectification works goes unattended to, the resultant damage from the failure to act is frequently being met with the building be uninsurable or premiums skyrocketing even more!
- Keep your owners informed of the strategies for long term care of the property to ensure they understand what levies are raised for and that they can see the progress.
As an owner, ensure:
- Your own unit is insured for contents; and
- Educate yourself on how a body corporate community operates and your part in it through following the by-laws.
To our clients that have been impacted by these weather events across three regions, we have or have tried to contact you and hope that you have faired well. If not, please go to our website at wwww.abcm.com.au and fill out an insurance claim form so that we can provide this to your broker immediately. Tips for best practice for a are:
- You can make “make safe repairs” without lodging a claim, such as securing a tarp over any roof damage.
- To get the quickest response, one person, the building manager or committee member, door knock to understand the damage sustained to common areas, including balconies etc.
- Lodge one claim electronically through our forms section of the Archers website
- Provide as much evidence and detail as possible, including dates and times (mostly for Jasper) to determine which deductible should be applied – cyclone or rainwater.
- Advise of the contact details for those in the building making a claim together with the key contact person and how communications methods, modes of delivery is preferred
The claims process at a high level, involves lodgement of the claim, allocation of a claims assessor, assessors report to the insurer and the determination of the claim. Please note that insurers have up to 12 months to determine a claim and when events such as these occur, resourcing of relevant assessors, insurer claims managers and trades can impact the outcome.
Should you need anything further in relation to what you can do, please call us. Should you need any insurance advice specific to your claim or what do to, please contact your insurance broker.
Article Contributed by Nicky Lonergan, Managing Director, Archers the Strata Professionals