ICA outlines recommendations for strata complexes amidst rising insurance costs

Insurance costs have been driven by inflationary pressures.

The Insurance Council of Australia (ICA) has proposed recommendations to improve outcomes for consumers in strata complexes, addressing challenges outlined in a policy paper. 

These recommendations aim to mitigate rising strata insurance costs, which have been driven by inflationary pressures on repair and building supply costs, higher reinsurance costs due to significant insurance losses, and the increasing frequency of extreme weather events. 

Key areas include enhancing education requirements for strata managers and owners' corporation members, ensuring fee and service transparency, implementing better land-use planning, and embedding resilience into the national building code. 

Additionally, the recommendations advocate for investments in mitigation and resilience, improving design and construction compliance at the state and territory levels, and enforcing robust maintenance regimes. 

The ICA emphasised the need to reduce risks in the strata sector to lower insurance claims associated with repairs and rebuilds, thereby stabilizing insurance costs for consumers over time. 

The council also welcomed recent legislative changes, including a requirement for client consent before receiving commissions and expanded disclosure obligations for strata managers in New South Wales.

Insurers remain committed to leveraging their expertise to improve consumer outcomes, foster transparency, and promote disclosure within the strata sector, the ICA said.