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  • #37361
    razzarino
    Flatchatter

      Hi,

      I just have a question on strata insurance and broker fees.

      I live in a block of three units with two other owner-occupiers. We do not employ a strata manager and just handle maintenance ourselves. Our annual strata insurance premium with CHU went up over 10 percent this year, after being pretty flat last year. We use a broker called Edgewise. The premium is about $2230, which includes the broker’s commission. We asked the broker how much his commission is. He said their commission is $323 — which is about 14.5 percent of the total premium.

      He justified the 10 percent annual hike in the premium to “a hardening market”, and said the next best deal for strata insurance would cost well over $3000.

      So I have three questions:

      1) Does this seem a reasonable amount to pay for very vanilla insurance for three units?

      2) Is 14.5 percent a reasonable amount for brokerage?

      3) Can we avoid using a broker and just go direct to the insurer?

      Cheers,

      Razza

       

       

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    • #37366
      Cosmo
      Flatchatter

        Razza, our small strata just went through the exact same issues 6 years ago. We also go thru a broker and are insured with CHU.

        1) Does this seem a reasonable amount to pay for very vanilla insurance for three units? Our increase was from premiums  $2600 to $3365. When we got to policy I asked the broker if they could get cheaper and they came back with 2 other quotes close to but more expensive and said the increase was industry wide.

        2) Is 14.5 percent a reasonable amount for brokerage? I don’t know but see answer 3.

        3) Can we avoid using a broker and just go direct to the insurer?  My understanding and certainly experience (but this is limited) is that an insurance company will charge you the same whether or not you use a broker ie you won’t get it cheaper by not using a broker.

         

        Cosmo

         

        #37389
        Mailbox
        Flatchatter

          We (I) use a broker for our insurance and it includes three quotes and an explanation of the differences in coverage.

          Frankly the work involved in getting these quotes and explaining the differences would be beyond me so I see the charge as one of value.

          If you’re prepared to do the work yourself then go for it but let the broker know before they prepare a quote for next year so they don’t do work for which they are entitled to receive payment.

           

           

          #37425
          twosailram
          Flatchatter

            Couple of points. After a 10 year record of only very minor claims, and immediate previous premium having risen about 8%, we had a couple of claims totalling some $25K. This year, after much chasing, and 4 or 5 insurers declining to quote due to an unresolved claim, our renewal this year, which has been very reluctantly accepted due to the compulsory requirement for insurance, has a premium increase of some 30% PLUS a 10X increase in our excess. Our broker has put in huge hours both with the claims and the renewal.
            Your deal sounds OK to me.

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