Home / Regulatory & Government / Dangerous cladding taskforce sounds premium alarm
22 October 2018
The Victoria Cladding Taskforce has warned buildings with combustible cladding will cost more to insure.
“Owners face increased insurance premiums and reduced property values while combustible cladding remains on a building,” it says in a progress report released last week.
The report hails a new loan scheme to help strata owners pay for removal of dangerous cladding.
“We are going further than the rest of the country in assisting building owners directly impacted by combustible cladding through the development of a financial scheme Victorians can access to pay to rectify their buildings.”
But critics say the initiative, which involves councils, lenders and owners/owners’ corporations, is too complex. And joining the Cladding Rectification Agreements scheme will not offer instant premium relief, industry players say.
“The actual cladding rectification agreement process could have been better thought out,” Strata Community Insurance MD Paul Keating told insuranceNEWS.com.au.
“It’s positive that the Government is looking at ways to assist owners, but the premiums are unlikely to reduce until the risk has been mitigated, reduced or lowered. The benefit of reduced premium generally comes after the dangerous material has been removed.”
The taskforce says Victoria has completed an assessment of 1369 private buildings and planning permits where cladding has been listed as a construction material.
Varying amounts of combustible cladding was found in 218 of the 550 completed buildings inspected by the Victoria Building Authority.