Strata commissions under the spotlight

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6 February 2012

A Queensland property-owner has questioned the number of people receiving commissions for arranging insurance on a property.

Port Douglas resident Ian Campbell told the House of Representatives inquiry on strata insurance he uses a broker and is happy with their service.

But he questioned corporate strata bodies being paid a commission for arranging the insurance as well.

“Everybody has to make a quid,” he said. “Insurance brokers make their dollar by charging a commission that is paid for by the insurance company.

“What I object to is the body corporate managers charging a commission on arranging insurance. How many people have got their fingers in the till?”

Inquiry chairman Graham Perrett says when premiums rise the broker “certainly benefits” from the increase.

“If I were a cynical person I would think the body corporate management companies around the traps are all holding hands with the insurance companies so they can jack up the premiums,” Mr Campbell said.

“Our fee to the body corporate managers to run our show was about $5000 a year. The commission they were receiving on the insurance brought in $4000.”

The inquiry was told brokers were receiving commissions of 15-20%, with corporate managers being paid similar amounts.

“I think it is an absolute rort,” he said. “We are paying these people a fee to manage our business and then have to pay a commission on top of that. I think it is absolutely disgraceful.”