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Millionaires’ houses ruined by storm, residents are furious over insurance companies’ negligence and plans to demolish the damaged properties

Ian Harvey

After seven waterfront homes were badly damaged in Collaroy, the authorities are now threatening to demolish the properties. The residents are, understandably, not happy with the move. The houses are collectively worth $40 million and were badly ravaged when hit by a low-pressure system. The homeowners are awaiting approval and damage assessment from the insurance companies, who are taking an enormous amount of time to do the job. The main hurdle is the structure of the insurance system in Australia. The body overlooking the insurance companies, the Insurance Council, has come forward claiming that standard insurance policies do not cover damage caused by the sea, or sea storms.

Locator map for Northern Beaches

Locator map for Northern Beaches Photo Credit

The storm devastated a large number of the multi-million dollar homes on Sydney’s northern beaches with strong gale force winds and powerful waves. As if this wasn’t enough, the residents were told that their properties may face demolition in line with housing regulations.

Aerial view of a part of Sydney's Northern Beaches Photo Credit

Aerial view of a part of Sydney’s Northern Beaches Photo Credit

The owners of the properties ruined by the storm have not been able to go back in their houses, as they have been deemed structurally unsound. Despite this, after waiting a week for the damage assessment team from their insurance company to visit their properties, no one has turned up, and there has been no word from them.

After the devastation, the homeowners were under the illusion that their ordeal would be short-lived and that their insurance companies would step in to help them in reconstruction. However, they were appalled upon hearing the Insurance Council’s claims that the insurance companies are not responsible for their damages, and that they would have to finance the repair work from their own pockets.

The local residents are now banding together to take legal action against the council for not adequately informing its clients about the extent of the property insurances. The residents assert that it is very arrogant and disingenuous of the council to take up the application of the insurance for the houses on the sea front and not inform the buyers about their policies on the sea damage and erosion.

One of the residents Tony Cagorski, 55, who owns a $2.5 million home in Collaroy, lost his entire back yard after it was swallowed by the ferocious storm. Mr. Cagorski told The Australian that when he bought the house last year, the estate agent did not advise him about the potential risks involved with the property. The disgruntled resident expressed disgust over the lack of interest by the Council in the rehabilitation of the locals, and over the apparent arrogance of the Council by suggesting that their policies are clear about the sea front houses when they are not.