Sourcing insurance quotes a winner

The AAA is actively identifying Strata Companies, compelling their strata managers to obtain additional insurance quotes, thereby achieving significant cost reductions.

In one case, a strata management company had initially provided only a single insurance quote from CHU Insurance via a broker (BCB) also owned by Steadfast, as highlighted in last year's 4 Corners' Strata Trap story.

The insurance for 2024 was set at $16,000.

However, when AAA attended the Strata Company AGM and insisted on sourcing additional quotes, including from Strata Community Insurance (SCI), CHU lowered its quote for 2025 to $14,000, while SCI offered a quote of $9,000, saving the owners $5,000 and QUS and Hutch Underwriting just as competitive.

Ms. Reece asserted that the lack of competition allowed some insurance providers to overcharge without justification.

"The SCI quote included commissions for the strata manager and broker of only $1,400, whereas CHU's was more than double that," Ms. Reece stated.

"It was clear that the strata management company prioritized commissions over the best interests of the Strata Company and its owners.

"This conflict of interest is prompting many State Governments to consider banning insurance commissions.

"Strata Managers have a fiduciary duty to their clients (Strata Companies), yet they are neglecting this duty for personal financial gain."

In conclusion, Ms. Reece emphasized that Strata Councils must assert their authority.

"The Strata Manager follows the direction of the Strata Council, so if you request additional quotes, they must comply.

"Exploring the market is essential to uncover options, and it's evident that insurance is a major factor in rising strata fees.

"By comparing the market, you can secure the same coverage for less, which is simply smart."