Flat Chat Strata Forum The Professionals Current Page

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  • #8408
    Dudley
    Flatchatter

      Good Morning,

      At our recent AGM I raised the question of why the Strata Manager had not obtained competitive quote for our insurance. His answer was along the lines that the company we were insured with was always the most competitive.

      It was decided that the SM would ask the insurance company if they would reconsider the premium amount. It is worth noting that the premium has been paid and the policy in effect for some 6 months. Not surprisingly the insurer declined to reconsider premium amount. The SM has obtained competitive insurance quotes from 3 companies and they are all cheaper, up to 10%. The SM has not supplied details of any of the insurance policies, including the current one. He has also advised that we could cancel the current policy and re-insure with one of the companies that have quoted.

      My questions are,

      a) Is there a formula for calculating a refund of premium when cancelling a policy, and does this refund include all govt. charges and agents commission.

      b) Am I reasonable in assuming that our SM has not been looking after our interests over the last few years in not obtaining competitive quotes. I accept that I have been ‘slack’ in not being more involved in the past. It is a small plan and basically we have allowed things to just roll along. However, the costs are rising too quickly in my opinion and I accept that it is up to me to contain them.

      I look forward to your comments and advice.

      Many thanks,

      Dudley

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    • #16536
      Whale
      Flatchatter

        Be careful about changing insurance providers without first checking the product disclosure documents, and the schedules of your Plan’s current policy against those of/in the competitive quotes that your Strata Manager has now obtained.

        There are quite a few optional covers offered by strata insurance providers, and additionally different degrees of cover and monetary benefits within each of those; so be careful with gross premium comparisons and with breaking what may be a good relationship with your Plan’s long-term insurer.

        In response to your questions:

        a) Generally, any refund is made pro-rata on the premium only less the insurer’s administration fee (for processing the cancellation), as most government charges are not refundable by the Agency’s to whom they’re paid.

        b) Strata Managers (SM) also have a “relationship” with insurance providers (i.e. in addition to the financial ones that they declare in Agency Agreements), including with the Assessors that they deal with on your Plan’s behalf in order to expedite claims/payments, to obtain advice, to obtain certificates etc. So I don’t believe that a SM’s desire to maintain an established relationship of that type could be considered unreasonable, or not in your Plan’s interests, particularly as the S/M did obtain additional (and maybe more competitive quotes) from other Insurers when your O/C so requested.

        So in conclusion, I rang our Plan’s insurer prior to my putting together the 2012/13 budgets for our recent AGM, and they advised me of an estimated 15% increase 3 months down the track when our renewal’s due! So take a close look at the Policies and the relationships of both your Plan (claims history) and your S/M before making a move, and ask each of the providers about future premium increases. 

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