The premium doesn't know you cleaned the gutters

Planned preventive maintenance lowers risk. It rarely lowers the premium. The reason is not insurer indifference, and the gap is worth understanding before a committee spends money expecting a discount.

Opinion. Alex Hender, Chief Advocate, Acacia Collective Strata Management.

A renewal notice is one page with a number on it. Nothing on that page records that the gutters were cleared twice last year, that the switchboard was thermally imaged before summer, or that the fire pumps were tested on schedule. The number arrives, the levies move, and the folder holding the evidence stays shut.

The proposition is easy to state. Planned preventive maintenance lowers the chance of loss. Lower risk should cost less to insure. That is what risk-based pricing is for.

In Australian strata it mostly does not work that way. A committee should understand why before it spends money expecting the premium to answer.

What insurers actually do

Tyrone Shandiman of Strata Insurance Solutions put the position plainly in May 2026: insurers do not typically discount for demonstrated maintenance, because they treat it as the baseline expectation. What insurers do instead is load premiums, raise excesses and impose policy conditions on buildings with poor claims history or disclosed defects. A well-run corporation benefits by not having those conditions imposed on it.

That is a real benefit. It is also invisible. A penalty avoided never appears on the renewal as a line item, so the committee that funded the work has nothing to show the owners who paid for it, and the next committee cuts the line.

The reward is the claim that gets paid

The second benefit is larger and even harder to see until the day it matters.

Strata policies are exclusions-based. They respond to sudden, defined events. They exclude wear and tear, gradual deterioration, lack of maintenance, developing defects, and damage from a defect the corporation knew about or reasonably should have known about. Maurice Blackburn's insurance disputes team has published the wording from a real strata policy that bundles lack of maintenance, corrosion, rot and gradual deterioration into a single exclusion, and reports acting on a water damage claim across multiple units denied on exactly those grounds.

Amanda Belot of Strata Roof Management framed the test for committees in July 2026 as a question to ask before the loss: if this claim had to be defended, could the corporation show it was inspecting, recording and acting on what it found?

A roof torn open by a storm is one thing. A roof leaking because flashings and drainage have been degrading for six years is another, and the insurer will argue the difference. The maintenance record is what decides which story the evidence supports. Note the asymmetry: the corporation that never inspected has no record to produce, and the absence is not neutral.

Worth being precise about a related point. A denied claim does not extinguish the corporation's own duty. Under the Strata Titles Act 1988 (SA), section 25(a), the corporation's function is to administer and maintain the common property, and under section 30 it must keep buildings insured to replacement value. Those are separate obligations. Every jurisdiction has an equivalent maintenance duty. The repair still has to happen, and if insurance does not fund it, the owners do.

Where the argument does work

There is one market in Australia where maintenance and resilience move the price directly, and it is worth studying rather than envying.

Since 2018 the Cyclone Testing Station at James Cook University has run the North Queensland Strata Title Inspection Program on behalf of the Queensland Government. Bodies corporate get a free, independent inspection and a report estimating the building's resilience against cyclone damage, with recommendations. As at 30 June 2025, the successor Strata Inspection Program had received 299 registrations and issued 183 reports, per the National Emergency Management Agency.

Sure Insurance prices off those reports. The insurer states that it uses the voluntary reports to give lower premiums to bodies corporate that have invested in resilience, and has published an average reduction of around ten per cent for properties scoring well. Its own case study describes a Cairns building where mitigation works plus the JCU report took an indicative premium from about $20,000 to $11,606 including taxes. Treat those figures as an insurer's marketing claim rather than an independent finding, and note the first is from 2022. The direction is still the point.

What makes it work is not insurer goodwill. It is the report. The Cyclone Testing Station said as much in its 2022 submission to Treasury on the cyclone reinsurance pool: it argued for a uniform system of rating a building's resilience to a target hazard, and observed that some insurers take evidence of building condition on faith while others want it verified. CTS assesses five categories: grounds, wind, wind-driven rainwater, storm tide, and ancillaries.

The through line

An underwriter cannot price a claim it cannot verify. “We maintain our building” is an unverifiable assertion from the party with the most to gain from it being believed. Give the underwriter an independent, standardised, portable assessment and the assertion becomes a rating input. North Queensland has one for cyclone. Nobody has one for anything else.

That reframes the complaint. The barrier is not that insurers are indifferent to maintenance. It is that outside one peril in one region, the industry has no agreed way to tell a diligent corporation from a corporation that says it is diligent.

What I don't know

I am not going to pretend this resolves cleanly.

Cyclone is an unusually tractable case. It is a single modelled peril, geographically bounded, with a known and finite set of mitigations, and it had $60 million of Commonwealth and Queensland money behind the inspection and retrofit programs. Water ingress is diffuse, slow, and caused by a dozen unrelated failures across a building's life. Whether anyone can build a standard for gutters, waterproofing, switchboards and drainage that an actuary would rate against is an open question, and I have not seen a serious attempt.

Nor do I know who would own such a standard, who would pay for the inspections, or whether an insurer would accept an assessment it did not commission. Those are the questions I would want answered before arguing the case in public with any confidence.

What I am confident of is the shape of the gap, and that the current arrangement asks corporations to fund prevention on faith while pricing them on claims.

What a corporation can do now

Keep the record anyway, and keep it properly. Dates, scope, contractor, findings, what was done about the findings. Photographs.

Disclose at renewal rather than at claim. Give the broker the maintenance history with the proposal and ask them to put it in front of the underwriter. It may not buy a discount. It may keep a condition off the policy, and it will matter if the claim is ever contested.

Fund the program in the budget rather than treating it as discretionary. The cheapest year is always the one where nothing was inspected.

The gutter you cleared in April will not show up on the June renewal. It will show up in the loss adjuster's report in a wet August, and by then it is the only thing you own in that conversation.

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This article is general information about how strata insurance is priced and underwritten in Australia. It is not financial product advice and does not take account of any corporation's circumstances. Acacia Collective Strata Management Limited is not licensed to give financial product advice and does not recommend any insurer or policy. Speak to a licensed insurance broker or adviser about your own scheme.

Sources: T Shandiman, Strata Insurance Solutions, on LookUpStrata, 1 May 2026; Maurice Blackburn, strata insurance claim denials; A Belot, Strata Roof Management, via Archers, 2 Jul 2026; National Emergency Management Agency, Strata Resilience Program; Sure Insurance, residential strata and JCU resilience report material, 2022 and 2026; Cyclone Testing Station, James Cook University, submission to Treasury on the cyclone reinsurance pool, 2022; Strata Titles Act 1988 (SA) ss 25, 30.