NSW strata law reforms that take effect on November 30 may see litigation increase and premiums rise, according to one industry leader.

More than 90 changes to the law, affecting an estimated 2 million people, have been approved by the State Parliament.

Strata Community Insurance MD Paul Keating told insuranceNEWS.com.au that while there are many positives, including a reduction in bureaucracy, there are also concerns over a change that would increase liability for owners’ corporations and their insurers.

“There is a statutory duty to maintain and repair, and if you breach this you are liable for damages,” he said. “This will definitely increase the amount of litigation, and the cost of litigation, leading to higher premiums and additional costs for owners.

“Strata schemes generally are well behind in repair and maintenance responsibilities, and strata managers find it difficult to get owners to agree to raise funds to carry the repairs out.”

The minimum public liability sum insured will double to $20 million from the current $10 million, and strata insurers have already acted to incorporate this change.

CHU Underwriting Agencies says it welcomes the increase and has joined others in announcing an extension to its cover at no extra cost to owners’ corporations.

“This increase to $20 million will ensure owners’ corporations have the best level of protection in place for their schemes and any improvement to protect our clients’ properties and investments is a positive step,” CHU State Manager for NSW and ACT Anne-Maree Paull said.

Strata insurer Longitude has also welcomed the public liability increase and said changes such as disclosure of commissions and a requirement to get three quotes would benefit consumers.

“The old strata world was very under the radar, and any transparency for the consumer has to be good,” GM Gordon Bell told insuranceNEWS.com.au.

“It gives strata managers a bit more to do in terms of administration, but the good ones were already doing it.”

NSW Fair Trading is holding information sessions on the changes. Click here for more details.