Hi my strata manager claims they get 20% commission when sourcing out insurance. I was wondering if the insurance company pays them the commission or does that get tacked on top of our insurance policy? Our manager claims we don’t pay for it but another member in community claims we pay for it, is that right? We live in nsw
Here is my understanding of it. The commission is tacked on top of the insurance policy. Strata managers are no longer permitted to receive a commission from the insurance company. They get around it like this. The insurance company receives all the money. Then:
. The insurance company pays the commission to the insurance broker.
. The insurance broker pays the commission to the strata manager.
. The strata manager pays something back to the insurance broker.
My owners corp received an invoice from an insurance broker as follows:
Base Premium $4000
Fire / SES Levy $600
GST (10% of the above two items)
Stamp Duty $500
Insurers administration fee $220
GST administration fee $0
Broker Fee $1700
GST broker Fee $170
Strata Manager Commission $0
Total: about $8,000
The commission is roughly 20% of the total cost: If you google “strata insurance” and call a few companies for a direct quote, you would be quoted something closer to the base premium.