Why you should shop your strata property insurance around

With the sharp increase in strata property insurance over the past 5 years, Strata Insurance is without a doubt your # 1 expense in the budget. For some strata corporations, this can take up to 25% of the budget.

Having said that, shopping your insurance around seems like a total no brainer for strata corporations, but guess what… not everyone does it!

I’ve seen strata owners nitpick over every little expense line item in the budget, trying to save $20/ year on their banking fees, but simply skip over the insurance.

Why does strata property insurance get ignored? Here are the 3 main reasons;

1. Time and Planning. The main reason is that it takes time and planning to obtain several quotes on your insurance. If you leave it until the last minute, no one is going to want to provide you with a quote, so you have to start the process 60-90 days out from renewal time. It’s also a lot of work, as each broker will require reams of information in order to provide you with a proper quote.
2. Shared markets. Let’s face it, Strata Property Insurance is a bit of an oligopoly, with most brokers sharing the same underwriting. And since underwriters don’t really want to compete with each other, they simply decline to do so, leaving you with fewer alternatives. This can make it very difficult and frustrating to obtain competitive quotes.
3. Awkwardness. It can be awkward and uncomfortable to ask your current broker to provide a 5 year claims history so that you can shop them around. This can be even worse if you have a long history with them, but in that case, it’s all the more important to keep everyone honest. The owners will appreciate that Council went out and collected 3 quotes, and will lead to a more transparent and trusting environment.

Shopping your strata property insurance around can be very time consuming and difficult, but it is probably the most effective use of your time as a Strata Council member. Even a 10% savings as a result of your broker matching a competitive offer can result in much lower strata fees for your strata.

If you’re using a Strata Management company, then this is probably a good use of their time, so be sure to delegate to your strata manager if this is one of the services that they provide.

If you’re looking for some help with finding the right property insurance for your strata, please reach out to us today here to see how we can help you out.