Examination of strata building risks from cyclonic weather

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An Independent Study of Building Resilience in Tropical Australia
Examination of strata building risks from cyclonic weather by utilizing policy claims data
Cyclone Testing Station report to the Insurance Council of Australia.
Report: TS899 Version: 2013-06-30 Compiled by: David Henderson, CTS JCU Reviewed by: John Ginger, CTS JCU.

See FULL STUDY ATTACHED with Media release from ICA

SUMMARY
The Insurance Council of Australia engaged the Cyclone Testing Station to conduct a review
of insurance claims on strata properties that resulted from recent cyclones. The aim of this
study was to identify factors that may be contributing to insurable losses. By increasing the
awareness of all parties, including insurers, property owners and strata managers, to some of
the key factors that affect losses, it may be possible to focus on opportunities to reduce risk
and limit premiums. This pilot study has been based on Terms of Reference developed by
the ICA Strata Insurance Working Group, as included within the report. The report also notes
issues that are beyond the scope of the report.
It has been shown that the structural provisions in building regulations referenced in the
Australian building code and standards are generally appropriate with respect to wind loading
for the design strength limit state. Strata property and detached houses are built to the same
Australian Building Code and often use the same building materials.
In most respects contemporary houses and strata property should be capable of resisting
design wind events if properly designed and constructed. When specific elements are
identified that warrant changes to building regulations, an ongoing process is in place to
make these changes (e.g. recent changes to Australian standards to improve tile roof, soffit
linings and garage doors). It is important to understand, however, that any changes will
normally only apply to new properties constructed after the changes are implemented in
building regulations.
It is recommended that a process of regular property inspections, with intervals of perhaps
once every 7-10 years be investigated. The aim of these inspections would be to identify and
prioritise any site-specific factors that might affect building performance in future severe
storm events. Works carried out would make the building more resilient. It is proposed that
providing an insurer with evidence that an independent inspection has been conducted and
actions taken will demonstrate a reduction in risk and a corresponding reduction in premiums
and excess. If significant defects of a part of the structure are found (e.g. severe corrosion of
cladding) then a grace period of continued insurance should apply while rectification works
are undertaken. The inspections would need to relate the structural aspects of the inspections
to the building regulations at the time of the building’s construction.
Water ingress from wind driven rain has been identified as a key factor in insurance claims.
It is recommended that a study should commence as soon as possible, to minimize risk by
seeking a greater understanding of relationship to intensity of rain and wind gusts and
identify possible economic solutions in reducing the amount of water ingress and resultant
damage.
The report supported by previous damage investigation reports has identified for wind speeds
less than the strength design wind speed, ancillary items have taken on increasing importance
in claims costs. As structural issues have been identified and acted upon, the damage from
wind driven rain ingress and the damage to ancillary components (e.g. air conditioners, shade
cloth attachments, aerials and fences). The failure of ancillary components has also led to
damage to the main structure such as penetrations in cladding allowing further water ingress.