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Must SM get three insurance quotes?
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Yakov
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26/07/2017 - 11:57 am
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Our SM provided his commission paid by insurance company during an AGM, but refused to provide 3 quotations from different providers written reason not provide it. He said that it is not required to do on AGM.

I reckon that this is a breach of his contract as it is required according to the Strata Schemes Management Act 2015 clause 166.

Is he is correct?

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confused1
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26/07/2017 - 1:14 pm
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Our SM sends 3 quotes to the Strata Committee, they choose one which is presented at the AGM.

Reason being the renewal date doesn’t necessarily line up with the AGM date so the OC in the previous AGM agree to allow the SC to choose.

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dingo
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27/07/2017 - 8:04 pm
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Yakov said
Our SM provided his commission paid by insurance company during an AGM, but refused to provide 3 quotations from different providers written reason not provide it. He said that it is not required to do on AGM.

I reckon that this is a breach of his contract as it is required according to the Strata Schemes Management Act 2015 clause 166.

Is he is correct?  

There is nothing stopping you from obtaining your own insurance quotes. It’s best to approach an insurance broker for this.  However, SM companies are a business. The primary objective of any business is to make money. Check your agency agreement also, the base price of your agreement may take into account commissions from insurance, meaning the base price might increase if your SM does not receive a commission.

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Dazzle
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13/11/2018 - 5:13 pm
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I’ve asked this question before but I have not seen an answer, our strata manager gets the one insurance broker to provide 3 quotes, is this complying with 166 of the Strata act ? or can the sc insist on another insurance broker supply a quotation ?

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Jimmy-T
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14/11/2018 - 2:13 am
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In NSW strata managers are obliged by law to provide three quotes or explain in writing why they haven’t done so. There could be a valid reason  such as fewer than three companies being prepared to cover the scheme.

However there is nothing to stop committees sourcing their own quotes, albeit at the risk of seriously upsetting their strata managers (see previous posts).

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Stratabox.com.au
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28/11/2018 - 5:47 pm
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The SM must source 3 quotes. They may do it directly, acting as an authorised representative of various insurance companies, but it is now common for them to offload this tedious task to one or several brokers.

The SM has a duty of disclosure regarding his commissions, but the broker doesn’t. The broker will also charge a fee on top, which is usually disclosed.

It is also important to note that most brokers will only provide “general advice” (as opposed to “personal advice”). In doing so, they somewhat circumvent “the obligation to act in the best interests of the customer.”

In some cases the justification provided for not obtaining 3 quotes is that some of the insurers contacted refused to quote, which may be true, or not.

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