08 Dec Changes to Strata Policy Excess
Back in May 2022, we wrote about Why are Strata Insurance Excesses Increasing and discussed standard minimum excesses being increased to $1,000 across a number of insurers. Recently CHU Underwriting Agencies distributed an important update for their policyholders in relation to this, which we have published below with their permission.
Change to the CHU Strata Policy Excess
The property insurance sector has endured consecutive years of unprecedented events that have affected overall profitability.
The challenges that presented themselves with COVID including labour shortages and increasing costs of materials have been exacerbated by weather-related catastrophe events all over the globe. Closer to home, the east coast of Australia has seen its third consecutive year of La Nina activity, not only resulting in devastating floods but also ongoing storm and heavy rain activity.
The most effective lever CHU has against continued pressure on premiums is the policy excess. Therefore, in order to combat claims inflation pressures and continuing rising reinsurance cost we have reviewed the excess structure for CHU Residential Strata Insurance, Commercial Strata Insurance Plans and Build to Rent.
For all policy renewals with a renewal date of 27th January 2023 or after, the standard policy excess for all claims will apply as follows:
• For policies with a building sum insured > $2M – $2,000 all claims excess
• For policies with a building sum insured > $50M – $5,000 all claims excess
For existing policies with a building sum insured < $2M, the standard all claims excess of $1,000 will remain.
The above excess structure represents the standard excess application and is of course subject to ongoing underwriter review and change based on claims performance, etc.
Strata policy owners may choose to buy down to a lower excess which will result in a premium increase (subject to underwriting). Alternatively, they may wish to increase the excess to determine what effect this may have on the overall premium.
If you have any questions or would like to discuss other excess options, please do not hesitate to contact our office on 1300 880 494 or email [email protected].
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