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Are there major advantages to using a Strata Insurance Broker? It seems that our strata managers like us to use one, but need we do that?
Our compulsory strata insurance premium costs around $10,000 / year. I note that the broker’s fee is about 25% of that. And I’ve checked some other OCs that use a broker they were charged about 25% as well.
From what I can see, the broker supplies 3 or 4 quotes each year and we take the cheapest. But it’s been the same insurance company selected (a major strata insurer) for the past 10 years. If we had just renewed directly with that company it would have saved us quite a hefty sum.
I suppose strata managers don’t see it as their duty to get 3 quotes each year. But the committee could do that.
Is it that much work? And do the broker’s do anything much more? Do they, for example, help with claims? Do they get discounted policies that aren’t available to directly purchase?
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@Austman said:
If we had just renewed directly with that company it would have saved us quite a hefty sum.Errr… no you wouldn’t because the Insurers won’t pay you the commission or discount it from your premium.
Their view is that brokers and/or strata manager who take commissions do a lot of the legwork for them with regards to the policy sales and claims and it would cost them more to hire their own staff to fill the gap.
There was a move to make insurance commissions to strata managers illegal but that foundered when it was realised that a lot of (especially) smaller strata management firms depend on the commissions and would just go out of business.
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Many buildings use the broker or strata manger to find more advantageous rates, often by having an excess or threshold built into the policy. Stick with the broker but get them to work for you.
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