Strata Insurance Remains Affordable Despite Rising House Insurance Costs

CHU's analysis indicates that apartment owners face fundamentally different circumstances compared to house owners, which is reflected in their insurance costs. Despite general pressures in the insurance sector, strata insurance has continued to remain affordable for owners.

For brokers, this data can assist in positioning price increases as affordable compared to income growth and house insurance, and stable compared to the previous year. The report provides a breakdown of average strata premiums across major Australian cities: Adelaide at $842, Brisbane at $995, Gold Coast at $1,403, Melbourne at $920, Perth at $1,085, Sydney at $1,176, and Hobart at $765.

In comparison, house insurance premiums ranged from $1,933 in South Australia to $3,166 in Queensland. These figures highlight the relative affordability of strata insurance amidst rising costs in the broader insurance market.

However, a CHU survey revealed that 39% of respondents prefer the 'bare minimum' insurance coverage, reflecting a lack of understanding of the role strata insurance plays in protecting resilient communities. This preference towards underinsurance points to strata insurance being a grudge purchase for many owners.

CHU emphasizes the need for the industry to help lot owners understand the importance of appropriate coverage and the risks associated with inadequate insurance. The survey also found that most lot owners see opportunities for improvement in building maintenance.

Kimberley Jonsson, CEO of CHU, highlighted a clear opportunity for strata professionals-including insurance providers, managers, and brokers-to adopt a new mindset focused on education. She noted that education has a real, measurable impact on improving maintenance, compliance, safety, and coverage.