A major insurer has triggered a broker backlash after releasing a new direct strata product, cutting out broker advice.
Suncorp intends to provide cheaper insurance for small strata developments in North Queensland by selling direct to owners and body corporates, with the cost of insurance estimated at 20 per cent less than competitor products.
The policy is part of Suncorp’s Protecting the North program, which also contributes up to $10,000 towards the purchase and installation of industry-recognised enhancements to improve building resilience in the face of devastating weather.
The focus on cheaper cover, rather than expert advice, has caused a stir amongst North Queensland brokers, concerned the one-product-fits-all approach and the consequences of nil-advice policies.
NIBA Queensland Divisional Chairman Steven Hill says there are questions over generic insurance policies providing the necessary protection.
“No advice. No contestability. Body corporate committees require advice tailored to the specific property to ensure appropriate cover,” Hill says.
“Body corporates will have a very big hole in cover if they end up with big damage.”
Hill maintains that the mitigation funding is a less than genuine incentive, saying: “It should be more like $10,000 per lot or per unit, not per strata. The money will evaporate very quickly.”
NIBA has warned strata unit owners and body corporate committees in North Queensland that buying insurance cover without seeking expert advice may prove ineffective in protecting them from losses when disaster strikes.
Dallas Booth, NIBA CEO, has highlighted the importance of seeking advice when purchasing insurance cover in a difficult market.
“As a general rule, insurance companies do not give advice to clients on what product is appropriate – only licensed insurance brokers do this. And it is even more important to get advice when the market is difficult, which it has been for the past three years and continues to be in many areas of Australia,” Booth says.
“Strata owners and body corporate committees also need to make sure that they are complying with any requirements under state laws for adequate insurance arrangements. Once again, only an insurance broker will help and guide the committee on this issue.”