Tips to reduce your body corporate insurance premiums
The cost associated with taking out an insurance policy is one of the biggest challenges facing bodies corporate. Body corporate insurance can get expensive, but understandably so when you consider the wide range of items that the insurance needs to cover. In fact, the total insured value of strata schemes in Australia in 2018 was in excess of$995,000,000,000.
Credits: https://strataville.com.au/strata-in-australia-new-data-statistics/
While strata insurance is a necessary expense, there are ways you can reduce your insurance premium and not miss out on any of the benefits that the right amount of insurance cover provides. When it comes time for your body corporate to think about your premium renewal, consider these tips:
Tip #1 – Shop around
Like with many things, if you shop around you can often find something cheaper than what you already have. Do your research, and compare premiums from other insurers to see what they can offer your body corporate. You can do this yourself, or use a broker to compare different insurers.
Keep your needs in mind though, as cheaper does not always mean better. You’ll need to compare the coverage offered by different polices to find one at a competitive price that also meets the needs of your body corporate. You can also get help with this step from a body corporate manager such as Capitol BCA.
Tip #2 – Ask your insurance company how your body corporate can lower its premium
Sometimes, just talking to your current insurer and asking them about ways you can lower your premium is enough to give you some options – especially if you mention that you’re shopping around and considering moving your policy. Some insurance companies may even allow you a discount if your body corporate has not made any claims or if they combine multiple polices, so it’s worth asking if this is a possibility.
Tip #3 – Reduce the risk by making changes
If your body corporate can demonstrate that it is actively working to minimise potential risk, you may be able to lower your insurance premium. You might be able to use strategies such as removing overhanging trees to reduce the risk of falls, maintaining roofing to keep the roof structurally sound, ensuring gutters are cleaned regularly to help reduce the risk of storm damage, or having a building inspector conduct regular inspections
just to name a few. There are plenty of things you can do to reduce potential risks, and any costs your body corporate incurs will be offset by insurance savings.
Tip #4 – Check the replacement value is accurate
Bodies corporate must conduct an independent valuation of the building at least every five years, so that the value of the building always remains accurate. However, it’s usual for
insurance companies to automatically increase the value of the building each year on the body corporate policy. As time goes by however, the automatic value increase imposed by the insurer may exceed the actual independent valuation of the building. If this is the case, the body corporate can correct the value of the building with the insurer, which may reduce the premium.
Tip #5 – Pay insurance premiums in one lump sum
If your body corporate can afford to do it this way, paying the premium in one lump sum is usually a cheaper method, rather than paying by instalments.
Tip #6 – Increase the excess
The insurer will often lower the premium of your policy if you can increase the excess payable on a claim – although it’s important to make sure your body corporate has enough funds available to cover the cost of repairs which fall below the excess.
