Great news for Port Douglas apartment owners

Strata Insurance

Paul Makin

Journalist

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James Swindles from the Regal Apartments in Port Douglas is excited for his owners and says it’s huge step forward in their financial recovery from the Pandemic.

The Federal Government has thrown a lifeline to Port Douglas apartment owners by finalising the design of the reinsurance pool for cyclone and related flood damage following consultation on the draft legislation.

The reinsurance pool will be backed by a $10 billion annually reinstated Commonwealth guarantee and be administered by the Australian Reinsurance Pool Corporation and will come into effect from 1 July 2022.

Reinsurance is a highly complex global business. It’s insurance for insurance companies to offset their risk. It helps mitigate the blow of high-cost claims and protect their bottom-line. 

Owners will see a huge drop in their insurance premiums when this legislation gets through Federal Parliament.

Homeowners in Northern Australia with the most acute cost pressures are expected to benefit from up to 46 per cent premium discounts, strata properties up to a 58 per cent discount and small to medium enterprises up to a 34 per cent discount. Some 880,000 are expected to be eligible to be covered by the reinsurance pool for the risk of cyclone and related flood damage.

The windfall will reduce insurance premiums by up to $2.9 billion for eligible household, strata and small business insurance policies over 10 years.

Almost all of Port Douglas' holiday accommodation is strata titled with resort apartments ranging from 8 to 200 apartments.

Prime Minister Scott Morrison today praised the Member for Leichhardt Warren Entsch, who he says worked tirelessly for this to happen in the north. In fact, this has been 11 years in the making. Mr Entsch has in total tried to get four Prime Ministers, Kevin Rudd, Julia Gillard, Malcolm Turnbull and Scott Morrison to act in this matter, with only the later coming through.

A very happy Mr Entsch delivered the news today telling Newsport “It’s now time the Queensland Government came onboard to further drive down insurance premiums for Far North Queenslanders.

The Morrison Government has done the heavy lifting, now it is time for the Queensland Government to start supporting Far North Queenslanders by reviewing State Strata Legislation, including the option to choose to insure for full market value or full replacement value and to abolish stamp duty on insurance premium renewals which would further reduce premiums”.

Mr Entsch has also lobbied for more powers to be given to the ACCC to penalise any company not following the legislation.


Special mention

Mr Entsch made special mention in his comments today to Margaret Shaw from Airlie Beach. After her husband became ill, she was forced to move out of her Airlie Beach complex due to a severe increase in insurance premiums.

“Margaret has been with me on this journey for the past 11-years, since this crisis started and it’s been her comprehensive knowledge of the insurance industry that has assisted me in identifying solutions.”

Local operators and industry representatives happy

James Swindles the owner of Regal apartments in Owen Street Port Douglas says he’s delighted with the news and can’t wait to get a newsletter out to his 30 apartment owners.

“Our owners have had 2 years of virtually no income, but they still had to pay the very high insurance premiums, so for them this intervention will mean a lot”.

Australia’s peak organisation for apartment and unit owners has described todays announcement as “ground-breaking and the end of a financial nightmare”.

Australian Apartment Advocacy group (AAA) says thousands of apartment owners in North Queensland “had gone through financial hell in trying to meet rising insurance costs over the last five years and we hope that all political parties get behind it when the bills come before Parliament this week,” AAA head, Samantha Reece, said today.

“We have heard some horror stories from the North where people have given up trying to insure their apartment or unit in the most cyclone and tropical storm lashed area in Australia.

The Morrison Government intends to introduce legislation for the reinsurance pool in the first week of Parliament this month.

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