Does anyone have any tips with lowering body corp strata insurance for quotes?
We are with CHU but the body corp company is taking a big commission from them and premiums have almost doubled.
Thank you kindly!
Body Corp Strata Insurance
ilovefood12345 on 09/12/2024 - 10:42
Comments
For years, we've basically only had CHU (underwritten by QBE) actually quote for our building with the occasional other company coming in much higher. This year Flex came in cheaper (also underwritten by QBE).
Usually the quote is based on claims and the kind of building that certain insurance companies insure in their portfolio but really it's really probably the market as they can charge what they know they can. You need insurance and if 1 or 2 companies are only going to take the risk they can charge a huge premium.
Here are the official reasons this year why insurance companies didn't bother to even quote:
Axis (Underwritten by XL Insurance
Company)
Decline - Unable to offer terms on this
quote due to adverse claims history.Chubb (Chubb Insurance Australia
Limited)
This insurer is unable to quote due to
the risk not falling within the Insurer’s
appetite of a minimum building sum
insured of $50 million.QUS (Underwritten by Certain
Underwriters at Lloyds of London)
Decline - The building(s) sum insured
exceeds our maximum limit for that
location.SUU (Underwritten by CGU Insurance
Limited)
Decline - Unable to offer terms on this
quote due to adverse claims history.IIS (Underwritten by Certain
Underwriters at Lloyds of London)
This was ridiculously high.
- Hutch (Underwritten by Certain
Underwriters at Lloyds of London)
Decline - Building Sum Insured
exceeds $10M
Number of residential units exceeds 30
As for the management and broker fees of insurance. This is in the OC management company's contract. Easily negotiated. You can also tell them the insurance is too high and the broker will cut their fees in order to not lose the business.
Interesting. We went with Hutch this year as they were the cheapest.
Strata-managing companies are a rip off…I know because I have to pay them :(
At least they do something. Insurance companies collect double our OC Management fees and do nothing. Then if there are issues they claim a big excess if not rejecting claims OR worse accepting stupid claims (owners can claim insurance directly arghh). Never seen an insurance company go out of business for good reason.
Are you on the Committee?
Request your Strata Manager to seek option based on Nett of Insurance Commission.
Strata Manager may say due to loss of remuneration, they have to increase their management fees as their fees was structured based on receiving insurance commission.
How many quotes did you receive this year?
Few questions:
-How big is your building?whats your Building Sum Insured.
-Does your building have outstanding defects, WHS, fire orders?
-Whats your claims history like for the past 5 years?Our Strata building insurance due in 3 weeks. Would love to know any cheaper way to get new insurance. Thanks
The second largest strata provider Strata Community Insurance is not in your list Neil try them? You can approach some of these guys directly too
They never responded despite broker pinging them for an update:
SCI (Underwritten by Allianz Australia
Insurance Limited)
Awaiting responseLongitude also no response.
Think it's worth contacting SCI directly and asking why they never came back to quote?
Cant do any harm?
Anyone know if there is any harm in approaching multiple brokers?
My OC is hopeless - getting in touch with them is difficult and they don't reply to emails or calls. Does anyone have a good one (if they exist?) Hence why I want to do my own quote to see if I can actually get the premium cheaper.
Not your business if you are not on the OC, that's their job.
Sorry! I confused myself. I meant strata manager. We're 3 on the block and we're all on the OC but the strata manager is saying that they are charging minimal management fees and the reason for the 1k increase is mainly due to the double in price of the strata insurance.
You're automatically on the OC. Each property is part of the OC. Do you mean the Executive Committee (or equivalent of it has a different name in your jurisdiction)?
If there are three you might want to consider self managing. Or find a more optimal manager. Or acknowledge and make peace with the reality of your situation.
Also have 3 on the block. A few years ago we took over from the strata management company and have saved heaps by self managing. We deal directly with the insurer, no broker. There’s insurance, gardening and the occasional minor repair, and a formal set of minutes and budget each year, which only takes a few minutes to put together. Our annual meeting is by email, which constitutes the minutes.
YMMV.
Our 8 townhouse strata insurance is $9k/yr for $7m cover and the Strata Manager doesn't take commissions (none that they admit to).
They use a broker and get 3 quotes for comparable T&Cs.
Our premiums have doubled in the past 5 years.
I'd suggest you get involved in the owners committee or mind your own business.
Sounds like OP needs to figure out the difference between a body corporate and a strata manager. Then ask the appropriate one about the commission.
Most if not all BCM organise for Strata Insurance, and they get about 2.5% Commission.
If you can get them to waive this will be a good start.Next is the Premium seems to be on an "auto-increase", without any regard of CPI.
Tabulate the past 5-10 yrs Sum Insured vs Premium.What I did was to organise for a new Insurance Valuation, be sure to get someone good.
Also to reduce the Excess.This is one of the biggest expense, really sucks!
Try Strata Fair
I sat on a Body Corporate Committee for 8 years in WA until we sold our apartment 3 months ago. It wasn't a large Strata around 40 apartments but the committee worked very hard during this time to get the best deal for the owners on everything.The block was built in 2005 and had the same Strata Manager during that time. We felt that they were taking us for granted and not doing enough and we changed them 2 years ago and got a first class SM in place. During that time we totally repainted the outside of the building, a massive task. We took all sorts of flack and I had to deal with some very rude and uncooperative owners/renters. We also dealt with the strata insurance and kept the increase to a minimum despite quite a few claims for water ingress. Strata Managers get 20% of the premium. That is standard everywhere. The refurbishment allowed owners, who had been struggling for years, to sell at a significant premium. The building looks great. There is one answer for those who have problems with the Strata Manager etc. Get on the Committee!!! The Strata Insurance industry is controlled by one company. I forget it's name. It does it through controlling shareholdings in different Strat insurance companies. I think 4 Corners did a major expose in the last year. If it is a very large apartment block then quite often the developers retain ownership of many apartments to enable them to control the committee and they will make sure that any independent owners who are not on the committee cannot get on. They appoint themselves as Strata Managers and then milk the system. They can also hide any building faults that appear. These day everyone is in a rush to buy an apartment with prices being what they are but if you can do you homework first before making an offer you should do so.
Our strata insurance was also with CHU. Managers recommended we renew with CHU, but as I am Chairperson, I asked for quotes and received 5. CHU were the 2nd most expensive. Coverage was pretty much identical between all 5 options, so I chose the cheapest, which was AXIS.
Sometimes it can be hard. Our building (strata plan) is part of a larger complex with a common four storey underground car park and also common retail units. The other buildings (four in total) are either another strata plan or a build-to-rent place. We all pay into a common building plan that sits above/below the strata plans - they pay the insurance for the whole place.
As you can appreciate, the sum insured on a large complex is significant. In our case about $450M > 600 units. At one point we had real difficulty in getting building insurance and actually had to get a panel of insurers who all took on some of the risk. It was difficult and costly to arrange. But more recently we have been able to get insurance through individual companies - and had more than one quote. Our building insurance has actually dropped. Since insurance is a significant part of the strata fees, it has meant that even with rising costs elsewhere, we have been able to keep increases in strata levies to below inflation - which is nice.
The tip is you need a competant strata manager and also a good insurance broker.
Speak to an insurance broker (or a few) and see if there is a better deal.