Unit group wants regulators to act on insurance gouging

A Townsville unit owners group is putting the lie to claims North Queensland is a risky place to invest, releasing figures showing insurers are gouging properties for millions of dollars.

A Townsville unit owners group is putting the lie to claims North Queensland is a risky place to invest, releasing figures showing insurers are gouging properties for millions of dollars.

The group is ramping up pressure on regulators — and politicians — to act.

“(The insurers) are making a killing,” Townsville Lot Owners Group spokesman Andrew Turnour claimed.

The strata market is one of the hardest hit sectors in an ongoing insurance crisis.

But the owners of properties have been reluctant to be identified, partly for fear about any impact on their properties’ values or sales potential and also possible retribution from insurers.

The group has been gaining access to hundreds of invoices from North Queensland body corporates with the proviso that properties will not be identified.

It says one Townsville complex of 42 lots has paid $1.24 million in premiums and made $65,000 in insurance claims over the past 16 years.

The figures equate to a highly profitable loss ratio of just over 5 per cent.

In 2020, regulator the Australian Competition and Consumer Commission reported an average Gross Loss Ratio of 86 per cent in Northern Australia, on home, contents and strata insurance, in the 12 years to 2018–19 compared with a 60 per cent GLR in the rest of Australia.

Mr Turnour said the Townsville unit property was by no means atypical — at least for strata.

“There are many buildings paying more than 10 times the premiums of similar properties in South East Queensland on the premise that there’s more damage in North Queensland. It’s not true,” Mr Turnour said.

The invoices also show strata policies are being loaded with public liability cover well in excess of the $10 million value stipulated in the state government’s body corporate regulations, hiking premiums and the stamp duty and GST revenues to government.

From tax invoices inspected, they found the average public liability cover was $22m.

Mr Turnour believes more than 90 per cent of Townsville strata policies are non-compliant on public liability and that it is very much a state issue, although the state government says regulation of insurance is a federal issue.

With a federal election due within two months, the group is now ramping up pressure on current North Queensland federal politicians, asking strata residents to rate them on their performance on insurance.

It says it will report back on its findings.

Originally published as Unit group wants regulators to act on insurance gouging