ARMA Insurance Brokers CQ Newsletter May 2022

Hi everyone, can you believe it is May already!  It has been a busy couple of months here at ARMA Insurance Brokers CQ as always.  The Insurance Market continues to be challenging to say the least with premiums still increasing and it is getting increasingly difficult in dealing with Insurers with their service times increasing significantly which is greatly affecting the speed at which we are able to settle claims.

I attended a Personal Development Day in Brisbane regarding the new Insurance Brokers Code of Conduct which will come into effect on 1st November 2022.  Since the Hayne’s Royal Commission, there are the 6 Principals which every Broker must adhere to.  They are:

  • Obey the Law;
  • Do not mislead or deceive;
  • Be Fair;
  • Provide Services that are fit for purpose;
  • Deliver services with reasonable care and skill; and
  • When acting for another, act in the best interests of that other.

For us here at ARMA Insurance Brokers CQ, we already adhere to each of those Principals as they are now, and always have been, key to our business and they have always worked in the best interest of our clients.  The main change for ARMA Insurance Brokers CQ is there will be different reporting requirements however, the service to our clients will continue to be our key focus as always.  I will keep you up to date with any further changes as the 1st November approaches.

Until the next newsletter, be safe and as always please do not hesitate to contact us if we can be of any assistance at all.


Tony Noyes

ARMA Insurance Brokers CQ.

Underinsured: What happens when your property is underinsured and experiences a total loss?

Being underinsured in a ‘total loss’ property claim can have dire financial consequences. Whether deliberate or not, about 25% of property owners don’t insure their buildings for the correct replacement value. 

It can however be complex arriving at the correct figure. This article explains how you can settle on accurate building and contents sums insured – without relying on guesswork.

How is total loss defined?

This term, also known as ‘actual total loss’, indicates there’s nothing to salvage, even for repairs. In the event of a such a loss, your sums insured should allow for full replacement and reinstatement of your property – this is what you need to consider when selecting your sums insured.

Another useful term to know is ‘constructive total loss’. That’s when the estimated repair costs exceed the property’s insured value. In this instance, the insurer may pay out the policy or rebuild the property. Constructive total loss also refers to an insurance claim settled for the full value of the policy.

The risks of underinsuring your property.

Underinsuring your property means you’re not adequately protecting your assets. This can be a major issue in a total loss.

As a yardstick, if your insurance policy covers 80-90% or less of your building & contents replacement costs, you are underinsured. In other words, if you suffer damage or loss, the insurer will only reimburse you up to your Sum Insured. If your Sum Insured is not adequate, you will have to pay the shortfall.

For many, this could mean that there won’t be enough funds from the insurance settlement to rebuild the property and furnish it to the same standard as the original.

Stop and think:
If you experienced a total loss, would your savings cover the cost to rebuild and furnish your building? For most, it is highly unlikely, making it essential to have sufficient insurance coverage in place.

Factors that can lead to underinsurance.

  • As you accumulate more possessions and upgrade your assets, you may forget to update your insurance cover.
  • Underestimating building costs are a common cause of underinsurance. At present, building costs will continue to increase due to demand, the impact of the pandemic on supply chains, and new compliance standards from local, state and national authorities.
  • Major catastrophic events impacting large populations e.g. bushfire or flood can make tradespeople difficult to source. This can increase costs due to high demand, scarce building materials and delayed building work. Insurers however often have contingency plans for such circumstances.
The importance of valuing your property correctly 

As explained above, if you are underinsured, it means you have paid for an insurance policy that doesn’t cover the full cost of your potential loss or the financial impact on yourselves and your family. It means that in a total loss you will have to pay for the additional cost of replacement over and above the nominated sums insured. This can be financially devastating, and underscores the importance of accurate coverage levels.

If you overinsure your assets – that is, for more than their replacement cost – you’re overpaying for insurance. There are no additional benefits for you to fork out a higher premium where the property’s value doesn’t warrant it – the Insurer will still only pay up to the necessary amount to replace and reinstate the property.

Tips to avoid underinsurance.

Avoid some common mistakes property owners often make in valuing their properties. Consider the following:

  • Review and update your sums insured.
  • Do not assume the resale value of the property is the same as the cost to rebuild it.
  • Do not rely on a bank, architect, builder, real estate agent, tax assessor, accountant, or engineer – consult with a professional certified quantity surveyor or speak to an insurance broker about how to achieve an accurate valuation.
  • Do not deduct land value from financial valuation reports.
  • Go beyond the primary structure when setting a sum insured. In addition to the main property, consider what it would cost to replace driveways, retaining walls, pools, landscaping, fencing, foundations, or other inside or outside property elements that need coverage.
  • Be specific to your property, don’t just adopt a book value or refer to building guides.
  • Factor in new purchase prices, not second hand or the price it was 10 years ago – inflation makes a big difference.
  • The real installation and commissioning costs.
Getting your sums insured right 

When nominating your sums insured, the onus is on you to get it right. However, with complex insurance policies and online home contents/building calculators subject to a disclaimer, this can be difficult! A professional valuation by a certified quantity surveyor is vital to help protect your assets.

Additional to valuing the property itself, keep an accurate, up-to-date inventory of your possessions, the assets you keep in your building and on the premises, to account for new-for-old replacement costs. Ensure you detail valuables, particularly those you carry with you in and out of your home, such as laptops or other devices. A contents calculator can help to get you on your way.

Ensure you’re correctly insured – speak to an insurance broker

Insurance is one of the best strategies to manage property risks. ARMA Insurance Brokers CQ can organise an insurance appraisal on your behalf and guide you through the considerations as they relate to your property insurance. This would factor in the direct costs to rebuild your asset with the same sort of quality materials, but also the indirect costs, including permits, consulting fees, architects, engineers etc. If the building is dated or has heritage features, it may need upgrades that meet current building code requirements – another additional cost to account for. And, if your building is on a steep incline or in a high-density area, then bracing and safety measures should also be considered for any demolition and rebuilding.

ARMA Insurance Brokers CQ are here to help and can tailor an insurance program for you. They will explain the finer details about what insurance covers, and why failing to verify the value can cost you in the long run. With accurate insurance, you’ll effectively transfer your financial risk of building damage to the insurer, helping you rest easy when things don’t go to plan.

Client Testimonials: Tammy Sabariz: The Rayment Excavations story.

Originally established by Ian and Marilyn Rayment, for more than 40 years Rayment Excavations have been providing earthmoving and excavation services for civil, residential, and commercial construction and have built a solid reputation in the industry for delivering on time and on budget.

“Ian and Marilyn started Rayment Excavations in 1981 with a single backhoe to now having a fleet of over 160 pieces of plant and equipment from skid steers to rollers, graders and trucks,” Rayment Excavations General Manager Tammy Sabariz said.

“We have a quarry out at Yarwun where we supply and deliver granite boulders and decomposed granite and we do a lot of civil construction work for developers like of Aurizon, NRG, and council, and we work on a number of government and commercial projects.”

Tammy said after the growth of the gas plants on Cutris Island the company did a major review of their insurance needs.

“We found ARMA Insurance Brokers CQ could not only offer us the best insurance coverage and deliver on price, but they worked with us as well,” Tammy said.

“Making an insurance claim isn’t something we like to do however, what we have found is from a smashed windscreen to major equipment damage we’ve been able to pick up the phone and talk to Samantha and Tony and they would guide us through the entire process and get it done.

“When you’re in business you need to have the right people surrounding you and through having the partnership with ARMA Insurance Brokers CQ, it’s just one thing I know we don’t need to worry about and that we do have the right coverage.”

To see and hear Tammy Sabariz’s video testimonial, connect here now.

Welcoming back Jessica Perkins to the ARMA Insurance Brokers CQ Gladstone team.

In February, the ARMA Insurance Brokers CQ team welcomed back Jessica Perkins, who had been on maternity leave.

Jess has been with ARMA Insurance Brokers CQ since 2016 with over eight years insurance experience and handles all things insurance. Jess spent the first five years as our Residential expert and since coming back from maternity leave, she is currently undertaking training to assist with claims handling and Commercial portfolios. Jess is Tier 1 qualified and prides herself by working for our clients to provide the best service and outcomes.

We’re so excited to have Jess back as she is a passionate member of the team and integral to offering our customers a service they can value with the peace of mind they are looking for but most of all, she is fun to be around and always makes us laugh – welcome back Jess!

Why are my insurance premiums increasing?

Like fuel prices and the cost of living, insurance costs are rising and whether it be business insurance, your home and contents, or car insurance, there is currently significant upward pressure on insurance premiums.
In some cases, premium hikes are also accompanied by restrictions on coverage features. In the insurance industry, this is known as a ‘hardening insurance market’. In the insurance industry, a hard market is the upswing in a market cycle, where premiums increase and capacity for most types of insurance decreases.
So why are insurance premiums increasing? At present, and like all of us are experiencing in business, insurers are facing pressures from all directions which has impacted pricing and led to hard insurance market conditions.
How does a hardening insurance market translate when it comes to your insurance policy? In general, hard insurance market conditions may see you experience the following across several policy classes:
  • An increase in premium rates simply due to insurance market conditions, or your own claims history.
  • Your insurance excesses (deductibles) may increase.
  • You may not be offered coverage at renewal because an insurer can no longer provide it within their risk appetite.
  • You may be offered reduced coverage at renewal e.g. lower policy limits available, some coverage features may no longer be available e.g. aluminum cladding exclusion and PI Insurance.
  • You may encounter strict policy conditions and need to implement additional risk management measures before an insurer will agree to cover you.
To assist you with understanding the market and your options to get the best insurance for you, ARMA Insurance Brokers CQ provide professional advice on the most suitable, and best available cover to protect your business and / or assets. We assess your risks, advise you on essential covers, and also how you can structure coverage in the most cost effective way.
In an insurance claim ARMA Insurance Brokers CQ “work and fight for you“. We work hard to resolve your claim efficiently, communicating with you at each key stage. The technical knowledge of an insurance broker and strong insurer relationships can make all the difference when negotiating to achieve the best possible claim outcome.
To find out more give our team a call today – Gladstone: (07) 49 787 261 or Biloela: (07) 49 924 728.

Celebrating our Clients.

It’s our Newsletter “Shout Out” to one of our great client’s, the team at PK’s Automotive. PK’s is owned and run by partners, Naomi Patterson-Kane and Dylan Bowser. Naomi’s father, Steve Patterson-Kane and Rob Allport complete the team of passionate and highly experienced tradesmen. Each of the team strives to do their best every day to ensure your car is running at its best, and more importantly – that it is safe!
Established in 2017, PK’s are a locally owned family run business, who are passionate about looking after your pride and joy. Diagnosing and repairing all vehicles- from the old school beasts (the boys favourite) to the very new.
To find out more about PK’s, connect here:
At ARMA Insurance Brokers CQ, integrity is core to our business. We don’t just sell insurance; we work and fight for our clients to protect what’s important to them.

ARMA Insurance Brokers CQ specialises in business (commercial), farming (agribusiness) & general insurance solutions

We currently offer over 50 types of “standard” insurance for all types of insurable risk. The ARMA team works on behalf of our clients to find the most suitable and comprehensive policy and then negotiate the most competitive price on that policy. We also manage all claims quickly and effectively.  Why not get a quote today and see how we can offer you a service you can value with the peace of mind you’re are looking for. Phone Gladstone on 49 787 261 or Biloela on 49 924 728.

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