428. Is “DIY” Strata Insurance Possible?
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Reena Van Aalst joins me to cover:
- when it might be ‘unreasonable’ for a building to lodge an insurance claim,
- whether owners can remove the strata manager and broker from the insurance equation and if so, should they?
- the importance of understanding your customer’s language, and
- how the Tribunal is dealing with urgent applications.
Strata Insurance is confusing because it does not only cover “Common Property”.
It has all these “add ons” which seem to cover the lot owner and the contents of their lots. If this is the case why would a Lot owner use their own insurance for contents?
The problem is that this aspect of the insurance is not clear – for example the insurance needs to explicitly state that “Lot owner contents are not covered unless as a result of a common property problem”.
Thanks for your good stuff. My take (as treasurer of a large strata) is that strata managers do not charge a lot in fees – pretty skinny revenue really in the context of professional services – and the commission they earn for arranging our insurance is an important part of their annual revenue. If they were not to receive the insurance commission I feel their fees would soon creep higher, to compensate.
As a footnote:
our strata manager has offered to let us go directly to a broker (and pay the broker “fee for service”) but I feel that we wouldn’t be saving any money. We would be paying the broker and, as said above, the strata manager fee would quickly trend higher.
What do others think?
Another footnote: in my experience the fees charged by strata managers are not excessive. (My old 14 unit strata in Canberra we paid $3,800 pa. Chump change! And they slaved their g*ts out managing horrible hail repairs etc etc).
I’m writing this before listening all the way to the end of your pod, so I apologise if you deal with it.