A strata unit owner has lost a dispute over an insurer’s decision to increase her premium after a neighbouring property’s occupancy status changed.

The complainant, who lived in one of the site’s two units, changed the other home’s strata policy status from mixed occupancy to owner-occupied when another owner moved in.

Insurer Suncorp then increased the policy premium by $348.25.

The complainant said this was unfair because she believed owner-occupiers were more likely to care for their properties. She argued the premium should have been reduced or remained the same.  

Suncorp said the increase was applied correctly, noting occupancy was a “key risk detail used in premium calculations for strata insurance”.  

It said modelling showed owner-occupied properties had a higher frequency of storm damage claims than other occupancy types, which factored into its decision.  

The complainant also noted the policy did not include incentives such as credit for cyclone-proofing work, and that she had no claims history.

Suncorp acknowledged her concerns around policy incentives and said it would review the cyclone mitigation features she had installed and adjust the premium if appropriate.

In its dispute ruling, the Australian Financial Complaints Authority says Suncorp is entitled to increase the premium.  

“I acknowledge the complainant has expressed her reasons for her dissatisfaction with the premium increase,” the authority’s ombudsman said.

“However, she has not provided any information to show the premium increase was calculated or applied incorrectly.

“The insurer explained its internal analysis and modelling showed a higher frequency of storm claims for owner-occupied policies as opposed to other occupancy types.

“There is no contrary information to show this is incorrect.”  

AFCA says it does not have the power to determine how an insurer assesses risk factors, and the complainant can try another insurer if she is unhappy with the policy.

Click here for the ruling.