I have called multiple insurance companies and arranged my own strata insurance. I can’t see the benefit of paying somebody 20% of the premium to do the same job for me.
With my personal knowledge of the property, I may have negotiated better terms: One of the questions the insurance company asked was whether we owned personal property. I said “yes, we have letter boxes”. The insurance company rep said “no, that’s part of the building”. It turned out that we did not own any personal property. i.e. we don’t even have a lawn mower.
Once that question was correctly answered, we were offered our lowest premium for the past five years.
I understand that strata managers rely on that 20%+ insurance commission for their income. It would be more honest to factor that amount into their monthly management fee.
Charges like insurance commission, “postage, copying, phone calls, stationery”, insurance valuation, income tax returns are strata management fees by stealth. Instead of putting them in the strata management contract, they put it in the budget and get the owners corporation to approve the budget.
We had roughly $1,400 of budget expenses added on to the $3,600 management contract. Hence, the real cost of the strata manager was $5,000 per annum.