Insurance renewal questionnaires for residential strata and commercial buildings in Victoria now routinely include cladding questions. They did not five years ago. The shift has been gradual, but the direction is unambiguous — and the questions are getting more specific each year.
For owners corporation committees and facilities managers, the question at the next renewal is not whether you will be asked about cladding. It is whether you will have a useful answer.
The questions you are now seeing
The detail varies by insurer, but the questions cluster around four areas. First, whether the building contains any aluminium composite panel (ACP) or expanded polystyrene (EPS) cladding. Second, whether the building was assessed by Cladding Safety Victoria. Third, the current status of any identified cladding — rectified, in progress, or unaddressed. Fourth, what evidence exists for each answer.
The questions that used to be “do you have any combustible cladding” — answerable with a yes or no — are now structured to expose buildings where the OC does not actually know. Insurers have caught on that “no” sometimes means “we have not checked.” The newer wording often makes “we have not checked” a separate answer, and price the premium accordingly.
What “we are working on it” looks like to an insurer
Insurers do not expect every building with combustible cladding to be fully rectified at renewal time. Rectification is a multi-year project for many buildings. What insurers are looking for is whether the OC is managing the issue — and that takes a specific shape.
A defect report on file, dated within the last few years. A documented decision (a committee resolution, a special-meeting outcome) on the course of action. Evidence that the action is proceeding — works in progress, or a documented risk-management plan with milestones. An ongoing facade inspection cycle that monitors condition.
That combination tells the insurer the building is being actively managed even if rectification is not yet complete. Most insurers will continue cover, at a manageable premium, where that picture is in place. Where it is not, the response ranges from premium loading to coverage exclusion to non-renewal.
The documentation that holds up
The single document that does the most work at renewal is a current defect report from an accredited facade specialist. It establishes that the cladding has been assessed, identifies what is on the building, and gives the insurer something specific to underwrite against.
After the defect report, the next most important documents are the OC’s response to it — minutes showing the report was tabled and considered, the resolution that authorised next steps, and any contractor engagement that followed. Together with the defect report, those minutes form what insurers and regulators look for as a “defensible compliance record.”
A building that has commissioned no assessment and has no documentation has no story to tell at renewal beyond “we have not looked.” A building that has the assessment, a documented decision, and a plan in progress has a story even if rectification is months from completion.
Pricing and exclusion patterns
Three patterns are emerging across the Victorian market.
The first is premium loading on buildings with identified combustible cladding that is unaddressed. The loading is significant — often double-digit percentage increases — and tends to compound year on year until the cladding situation changes.
The second is targeted exclusions. The insurer continues cover on the building generally but carves out cladding-related risk specifically. In the event of a fire originating in or spread by the cladding, the OC carries the loss directly. This is increasingly common on higher-rise residential.
The third is non-renewal. Where the OC cannot demonstrate active management of a known cladding issue, some insurers are declining to renew and letting the OC find cover elsewhere. The elsewhere is usually more expensive and may carry similar conditions.
What to do before your next renewal
If your building has not been assessed for combustible cladding, commission an assessment. The cost is modest relative to the insurance consequences of being unable to answer questions at renewal. If your building has been assessed and the defect report identifies issues, get a documented committee decision on the response — even an interim risk-management plan is far stronger than nothing.
If your renewal is approaching and you do not have current documentation, six weeks is usually enough to commission an assessment, receive the report, and table it at a committee meeting in time to present a coherent answer to the insurer’s questions.
If you want to talk through what a credible renewal-ready compliance position looks like for your specific building, contact us.