CoreLogic Australia has introduced Strata Sum Sure, a new tool to streamline property insurance for Australian strata-titled properties. This tool offers quick and affordable rebuild cost estimates, aiding strata managers in ensuring adequate insurance coverage.
With over 3 million lots in 356,788 strata schemes, Australia has a significant number of strata properties. Unlike standalone properties, strata owners have individual titles for their units or townhouses while sharing ownership of common areas.
Insuring a strata property involves a thorough assessment of the replacement cost for both the building and common areas, taking into account factors like construction costs, inflation, demolition expenses, professional fees, and compliance with building standards.
CoreLogic Australia’s Insurance Solutions Director, Matthew Walker, highlighted the substantial growth of strata living in Australia, particularly in New South Wales. However, he noted the challenge of accurately determining rebuild values for strata properties.
The current valuation process is manual, costly, and infrequent, often leading to underinsurance due to rising construction costs. While some states mandate regular insurance valuations, others merely recommend them. This inconsistency, coupled with the limitations of traditional valuation methods, poses risks for strata schemes.
Discovering Strata Sum Sure
Strata Sum Sure is an innovative tool designed to streamline the process of generating accurate rebuild cost estimates for strata managers. By leveraging advanced algorithms and real-time cost data, the tool provides a comprehensive assessment of the estimated replacement cost for buildings and common areas, including driveways, car parks, and shared facilities.
The platform meticulously reconstructs the property, considering factors such as materials, labor requirements (including design, project management, and professional fees), as well as demolition and debris removal costs, all while adhering to relevant regulations. By incorporating data from national suppliers, Strata Sum Sure refines the estimate, enabling strata managers, body corporates, and owners to make informed decisions about insurance coverage.
Walker emphasized the tool’s potential to revolutionize the insurance process. By using Strata Sum Sure regularly, strata managers can proactively monitor insurance needs, minimizing the risks of both underinsurance and overinsurance for owners and investors. Walker highlighted the tool’s unique ability to enhance transparency and efficiency, ultimately helping strata managers meet compliance requirements and safeguard the interests of property owners.
Built upon the robust foundation of CoreLogic’s Cordell Sum Sure platform, which is already widely used for residential home rebuild estimates in Australia, Strata Sum Sure incorporates crucial factors such as bushfire risk, construction cost trends, and other market indicators. A dedicated team of researchers ensures that cost inputs remain up-to-date, guaranteeing the accuracy of each estimate.
The tool’s continuous accessibility empowers strata managers to re-estimate property values as needed, without incurring additional costs. This flexibility allows for proactive monitoring of insurance needs and ensures that properties are always adequately covered.
Strata Sum Sure’s automated reporting capabilities further streamline the process, enabling the efficient revaluation of entire strata portfolios. By sharing insights quickly with owners’ corporations, strata managers can reduce reliance on traditional, time-consuming valuation methods.
Shaping the Future of the Strata Sector
The move to higher-density living in Australia is fueled by the need for affordable housing, efficient land use, and the optimization of infrastructure resources.
CoreLogic and Archistar’s recent study highlighted the potential for an additional three million strata units across Australia’s capital cities. Meanwhile, the Australasian Strata Insights Report revealed that over 200,000 new strata lots were added in the past two years, with NSW reaching over one million strata lots after a 9% increase in that time.
By improving the precision of rebuild estimations, Strata Sum Sure supports compliance with strata regulations and ensures the protection of owners’ and investors’ interests, according to Walker.
Walker further emphasized that Strata Sum Sure is a vital tool for the industry, designed to meet legislative standards while solving broader issues around risk management and transparency in the strata market.
