Facade material selection directly affects building insurance - both the cost of cover and whether cover is available at all. Since the cladding crisis exposed the fire risks of combustible facade products across Australia, insurers have fundamentally changed how they assess buildings with external cladding. Buildings with non-combustible facades and proper documentation face fewer barriers. Buildings without them face premium increases, coverage exclusions, or outright refusal.
This article explains how insurers now evaluate facade materials, what documentation they require, and why the material decision at design stage has financial consequences that last the life of the building.
Why have insurers changed their approach to facades?
The cladding crisis was an insurance event as much as a fire safety one. Combustible aluminium composite panels - specifically those with polyethylene cores - were identified on thousands of buildings across Australia. Several high-profile fires, most notably the Lacrosse building in Melbourne (2014) and the Spencer Street fire (2019), demonstrated that combustible facades could allow fire to spread rapidly up a building’s exterior.
Insurers responded by re-evaluating their exposure. The industry’s position is now straightforward: combustible cladding is a known, quantifiable fire risk, and underwriting must reflect that. Many insurers now routinely request facade material documentation as part of the assessment process for multi-storey buildings.
What do insurers look for in facade documentation?
Insurers are not facade engineers, but they have become significantly more specific about what they need to see. Typical requirements include:
- AS 1530.1 non-combustibility test reports - the same test the NCC references for Deemed-to-Satisfy compliance. Insurers want to see the actual test report, not a summary or marketing claim.
- Product identification - not just “aluminium cladding” but the specific product, supplier, and system. Insurers are distinguishing between solid aluminium, extruded aluminium, and aluminium composite panels because the fire performance is fundamentally different.
- Evidence the installed product matches the tested product - this is where traceability matters. A test report for one product does not cover a substituted product, even if both are described as “aluminium.”
Generic certificates or product data sheets are increasingly rejected. Insurers want NATA-accredited test results tied to a specific product from a specific supplier.
How does combustible cladding affect existing buildings?
Buildings identified through state cladding audit programs with combustible facades are facing real financial consequences:
- Premium increases - increases of 50-200% or more have been reported for buildings flagged with combustible cladding
- Reduced coverage - some policies now exclude fire-related damage to the facade itself, covering only consequential damage to the building interior
- Higher excesses - fire-related claim excesses increased substantially for affected buildings
- Inability to obtain cover - in extreme cases, buildings with high-risk combustible facades have been unable to secure insurance at any price
For body corporates, this translates directly to increased levies. For building owners, it affects asset value and saleability. A building that cannot be insured - or can only be insured at prohibitive cost - is a building with a material impairment on its value.
How does facade material selection affect new buildings?
For new projects, specifying non-combustible facade materials from the start avoids these complications entirely. This is a lifecycle decision, not just a construction phase decision.
A building that starts with documented non-combustible cladding does not need to be re-assessed, re-tested, or rectified when insurance markets tighten further. It does not need to be added to a state cladding register. It does not face the body corporate levies, legal disputes, and remediation costs that have followed the cladding crisis.
The insurance advantage of non-combustible facades compounds over decades. Every year the building renews its insurance without a cladding-related complication is a year the owner avoids costs that buildings with combustible facades are now bearing.
Why does documentation matter as much as the material itself?
It is not enough for a facade material to be non-combustible - the building owner needs evidence that it is. This distinction catches many projects.
Insurers, certifiers, and future due diligence processes all require product-specific documentation: CSIRO test reports from NATA-accredited laboratories, product identification matching the installed material, and traceability back to the supplier. A verbal assurance or a generic product brochure does not satisfy an underwriter reviewing a $50 million building.
Valmond & Gibson supplies all products - interloQ, element13, 165CW, and conneQt - with product-specific, NATA-accredited test documentation. interloQ carries CSIRO report FNC12595 confirming non-combustibility to AS 1530.1. element13 carries CSIRO report FNC12545. This documentation supports both the building certifier during construction and the building owner’s insurance requirements for decades afterward.
What should project teams do now?
Three practical steps reduce insurance risk on any facade project:
- Specify non-combustible facade materials from the outset. The NCC requires it for most multi-storey buildings under the Deemed-to-Satisfy pathway, but the insurance benefit extends beyond code compliance.
- Require product-specific test documentation from the supplier - not generic certificates, not marketing collateral, but NATA-accredited test reports tied to the specific product being installed.
- Retain facade compliance documentation permanently. Include it in the building’s operations and maintenance manual, the body corporate records, and the owner’s files. Future owners, property managers, valuers, and insurers will need it.
This is not about fear - it is the commercial reality of the Australian property market after the cladding crisis. Specifying non-combustible facades with proper documentation is simply the lower-risk path for developers, building owners, and everyone involved in the project’s long-term future.
Need facade compliance documentation for your project? Contact our team or download a product compliance pack.
Related Reading
- Combustible Cladding Bans by Australian State: 2026 Update
- Non-Combustible Cladding in Australia: NCC Compliance Guide
- The Hidden Costs of Choosing the Cheapest Cladding
- Aluminium Facade Warranties: What’s Covered
Last updated: 4 April 2026