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Some common factors contributing to the premium

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Some common factors contributing to the premium include:mandatory requirements of state-based lawsgovernment taxes on insurance (stamp duty and GST)age and condition of the buildingreplacement cost of the buildingrisk profile of the locationclaims history of the strata complexthe vulnerability of the insured property to an insured event (age, building codes, building designand materials)commercial activities carried out on the premises, such as holiday lettingfees and commissions from agentsthe level of excess payment selected by the body corporate, payable at the time of a claimthe costs of common property; for example car parks, stairwells, fire protection systems, liftsand pools.In recent years, issues relating to lack of maintenance, as well as the higher incidence of naturalperils, has meant insurance companies have been raising policy premiums to levels closer to those offree-standing residences.‘Further resource 2’ in KapLearn.The ‘Frequently asked questions’ web page, prepared by the Insurance Council of Australia in‘Further resource 2’, summarises the situation.Apply your knowledge 2Examine the reasons provided by the Insurance Council of Australia for supportingincreases in strata insurance premiums.1.3Motor vehicle insuranceAnother insurance cover that is widely used is motor vehicle insurance. An understanding of thedifferent types of cover available and what the policies cover is important in helping advise clients onthe most appropriate products for their needs.
7.8Insurance Advice |FPC004_T7_v6© Kaplan Higher EducationTypes of motor vehicle coverThere are four types of motor vehicle insurance cover available. They are:compulsory third-party (CTP) insurancethird-party property damage (TPPD) insurancethird-party property damage and fire and theft (TPPD F&T) insurance• comprehensive cover.Compulsory third-party (CTP) insuranceCTP insurance is, as the name suggests, compulsory in all states and territories of Australia, requiredbefore a motor vehicle can be registered. CTP covers the insured against claims by a third party forpersonal injury or death. Third parties can be passengers in the insured’s vehicle or other vehicles,pedestrians and cyclists. CTP is regulated by each state and territory and can only be obtained fromlicensed CTP insurers.Third-party property damage (TPPD) insuranceTPPD insurance covers damage caused to other people’s property (i.e. the third party) by theinsured’s car if it is involved in an accident. A car owner might take out this type of insurance if theirown vehicle is of low value and not worth insuring under comprehensive cover.Third party property damage and fire and theft (TPPD F&T) insuranceTPPD F&T covers damage caused by the insured’s car if it is involved in an accident, as with TPPD.It also provides cover for loss or damage to the insured’s vehicle caused by fire or theft. As withTPPD, people might take out this type of insurance if their own vehicle is of low value and not worth

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