Strata insurance in north Queensland is becoming “almost impossible to place” amid severe price hikes and an unwillingness by underwriters to cover high-value properties.

Zurich’s decision last month to cease writing new business in this market has shone a light on problems facing strata owners seeking coverage. Since March Zurich has raised premiums to existing customers by 350% while other insurers have instituted premium hikes of around 200%.

While half a dozen underwriters still write new strata business in north Queensland – including AMP, QBE, Allianz and RACQ – few are willing to take risks on properties valued above $10 million, especially if they are located on an island or north of the 26th parallel – that is, properties north of Hervey Bay.

Cairns insurance broker Joe Vella says Zurich had indicated it wanted to withdraw from the market entirely but decided to “keep a good face with its existing clients”.

“Their body corporate book grew too quickly and took them a bit by surprise,” he told insuranceNEWS.com.au.

Mr Vella runs a book of 4000 strata insurance clients in north Queensland, and says finding insurers to cover strata properties in northern Queensland at present is “either difficult or impossible”.

“Anything on a island, like Hamilton or Magnetic, is almost unachievable.”

Mr Vella says problems with price and the availability of strata coverage have been brewing for up to 12 months and will only worsen following the floods and Cyclone Yasi.

“The reinsurers in particular will be a lot tougher with their approach,” he said. “The market will be hardening again.”