Brokers have come under fire for not looking at strata buildings they are selling policies on.

Townsville residents told the House of Representatives inquiry hearing on strata insurance that insurers are applying blanket premium increases without looking at the construction of buildings or their location.

Many polices are sold through brokers, who were accused by residents of not undertaking any assessments that would enable them to argue for better rates for their clients.

Strata property owner Robert Chad told the inquiry he had talked to two brokers after quotes from Zurich and CGU had seen his premiums rise from $46,000 to $180,000 and $142,000 respectively.

The 56-unit building being quoted on was built of masonry blocks with concrete floors. There were no lifts or underground car parks.

“We told the brokers to go back and do their sums again and from CGU the premium became $133,000 and from Zurich it was $129,000,” he said.

“We called a special meeting of the body corporate, and minutes before the meeting the broker reduced Zurich’s premium down to $102,000 with an excess of $21,000.”

Inquiry Chairman Graham Perrett asked if the brokers had physically inspected the building before submitting the quotes.

“The local broker, I don’t know,” Mr Chad said. “The other broker from the Gold Coast certainly did not come up, but we made them aware these were brand new units. They are built like a bunker.”

Mr Perrett asked if the Gold Coast broker had been sent photographs of the units along with building plans and the local topography of where they were located.

Mr Chad said he did not know if this information had been sent, but the body corporate had told brokers they were well-built units.

Whitsunday Ratepayers Association Insurance Division Chairman Lester Riley told the inquiry brokers handling cover on about 500 member properties at Airlie Beach had not been to look at the properties.

“I have been assured no broker has looked at all the various properties to see where they are located,” he said.

North Queensland Insurance Brokers Compliance Manager Raymond Pavey told the inquiry most insurance business was done over the phone where a needs analysis was undertaken.

He said this covered items such as the age of the building, construction and what the roof was made of.

“The main thing the insurers are interested in is age, the construction, the location and a number of minor factor like lifts,” Mr Pavey said.

Asked by Mr Perrett whether claims history is considered, Mr Pavey said the insurer relies on information provided by the client.

How claims history is dealt with is up to the insurer, he said. But strata owners with good claims records do not get a discount.

“It seems to me the bad (strata owners) are punished, and the good are not rewarded,” Mr Perrett said.

“That is right,” Mr Pavey replied.