#18585
Kangaroo
Flatchatter

    Cosmo said

    Our OC self manages and has insurance through a broker. The broker gets a commission of 20% but it doesn’t cost the OC anything. The commission coming from the insurer profit margin.

    I believe the “industry standard” is 20% shared between the broker and the Strata Manager. Of course, some (most?) Strata Managers have set up their own brokerage company, so in effect they get the lot.

    There is no such thing as a free lunch.

    If you think the insurer hasn’t inflated the real premium by 20% so that they can pay the broker and still make a decent (indecent?) profit, then think again.

    When insurers tell you “it doesn’t cost you anything, we pay it out of our profit”, what they mean is “if you bypass the broker and deal  with us directly, we’ll still charge you the same premium”.

    A decade or so ago, we actually had a (mostly) honest Strata Manager, whose policy was to credit clients with any brokerage he received.