Bushfires and your Insurance Premiums
How will the recent Bushfires affect your OC Insurance Premiums?
The recent Bushfires across many parts of Australia have caused devastation on a grand scale to the environment and destroyed over 2700 homes and counting. Despite the generous donations from corporations, celebrities and everyday people, like you and me, it will still require insurance companies to pay out all those affected by the fires (those with appropriate insurance cover of course).
We have seen a sustained increase in Owners Corporation insurance premiums year on year for the past few years because of what the Insurance Industry has said is a market correction as a result of previously high discounting stemming from new competitors entering the market. Now that those competitors have established some market share, or some have dropped out from providing Owners Corporation insurance, prices are returning back to “normal.”
In order for the insurance companies to remain viable and return a profit to their shareholders the resulting action will most likely be to increase premiums to offset the costs of the 100’s of millions of dollars of claims that are coming out from the fires and other extreme weather events across the country. This will most likely affect Owners Corporations through a yet to be determined increased premium amount – you’ll only find that out when it comes to renew your policy. As a guide, underwriters are informing the industry to not be surprised with increases of up to 30% on your previous years premium.
All of this doesn’t even take into account of extremely high premiums paid by Owners Corporations unlucky enough to have EPS Cladding or large numbers of claims stemming from building defects.
In short, don’t expect your premiums to reduce any time soon, budget for the increase and pray for more rain, but not too much rain as that’s bad as well.