How Insurance Commission Rebates Can Save Owners Thousands

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Strata insurance is one of the highest expenses for any owners’ corporation or body corporate. The good news?  

You may be able to reduce your insurance costs and save thousands of dollars each year through insurance commission rebates. But what exactly are insurance commission rebates, and how can they benefit your strata scheme? 

What Are Insurance Commission Rebates and How Can They Benefit Strata Owners? 

Understanding the Basics of Insurance Commission  

In strata insurance, it is common for agents to receive a commission from the insurer or broker. The exact percentage can vary depending on regional practices and the agreements between insurance companies and strata managers. Commissions can range between 10% and 20% of the base insurance premium.  When arranging strata insurance for your property typical strata managers will receive this commission from the insurance company or the broker as part of their service agreement. 

However, a few select strata management companies (like us!) choose to pass on some or all of this commission back to the owners.  

Insurance rebates can translate into substantial savings, especially for larger strata schemes or those with comprehensive insurance needs. 

Did you know that we have forgone 100% of insurance commissions for over 30 years! 

How Rebates Work in Strata Insurance Policies 

In the strata industry, insurance commission refers to a fee that is paid to a strata management company or agent by an insurer or broker when the agent arranges or renews an insurance policy for a strata scheme (such as an apartment building or townhouse complex). 

This commission is typically a percentage of the insurance and are detailed in the rates contained within any agency agreement and should be clearly listed on your insurance renewal document.  

The insurance renewal document should list the insurance paid in full, the commission as well as any brokerage fees, which is a fee that you pay to the broker for their brokerage services.  

When a commission rebate is applied, a strata managing agent chooses to rebate the commission back to its owners, for example if the strata management agent chooses to rebate 100% of the commission payment, it is usually disclosed as $0 commission on the insurance renewal documentation.  

The amount you save can vary based on the commission percentage and is traditionally around 10-20% of the insurance premium. 

For example, if your strata manager earns a 20% commission on your annual insurance premium of $10,000, they could potentially offer you a rebate of up to $2,000, depending on their policy – that is, if they chose to rebate 100% of the commissions to you.  

How much the strata management agent chooses to rebate to the owners corporations is agreed between owners corporation and the strata managing agent.  

How Much Can Strata Owners Save with Insurance Commission Rebates? 

Potential Savings on Strata Insurance Costs 

The amount saved through insurance commission rebates can be significant. On average, strata owners can expect to receive rebates ranging from 10% to 20% of the total insurance premium payable. For buildings with high insurance premiums, this can result in thousands of dollars saved each year. 

Real Examples: How Our Owners Have Saved with Rebates 

Here is how some strata properties have benefited from insurance commission rebates: 

  • Residential Strata Scheme in Sydney: A 40-unit residential building saved over $5,000 annually through a 100% rebate of their insurance commission which was 20% of the premium. This allowed the owners’ corporation to fund an energy-efficient lighting project. 
  • Commercial Strata Scheme in Melbourne: A commercial office building with an insurance premium of $60,000 received a 100% rebate of the 20% insurance commission, a total of $12,000, which helped reduce owners’ levies by allocating the money towards the Capital Works Fund. 
  • Insurance Rebate Impact on a Commercial Strata: A commercial strata building in Sydney received a 100% rebate of $8000 which was 20% of the annual insurance premium.  This saving was used to upgrade the building’s security system, enhancing the safety and value of the property. 

Why Choosing a Strata Manager Who Offers Insurance Rebates Is a Smart Move 

Comparing Strata Managers: With or Without Insurance Rebates 

Not all strata managers offer insurance commission rebates. When selecting a strata manager, it is important to ask about their policy on insurance commissions and whether they rebate commission to their owners.  

Choosing a manager who offers rebates can significantly reduce your strata insurance costs, giving you more financial flexibility. 

How Rebates Provide Long-Term Value for Strata Properties

Insurance commission rebates are not just about short-term savings—they can also provide long-term value for your strata property. By reducing insurance costs, owners can allocate funds to other essential projects like building maintenance, sustainability initiatives, or community improvements. This, in turn, can enhance the overall value and appeal of the property. 

How to Maximise Savings Through Strata Insurance Rebates 

Negotiating Better Deals with Your Strata Manager 

Owners’ corporations can negotiate directly with their strata manager to ensure they receive the highest possible insurance commission rebate. When renewing or selecting a new strata manager, consider discussing rebate options upfront and evaluating how much you can save over the life of your insurance policy. 

Tips for Ensuring You Receive Full Rebate Benefits 

  • Review Your Insurance Policy: Check your agency agreement and your insurance renewal documents to see if commission rebates are being applied. 
  • Ask Questions: Make sure your strata manager is transparent about the commission they receive and the portion they are rebating back. 
  • Request a Written Agreement: Ask for a written agreement that outlines the rebate to ensures there is no confusion about your entitlement. 
  • Alternate Proposals:  Make sure to gather three quotes and actively request proposals from insurance brokers. Compare the commission rates they offer to ensure you get the best value. 

Frequently Asked Questions About Insurance Commission Rebates for Strata Owners 

What Is the Typical Rebate Amount? 

The typical rebate amount can range between 10% and 20% of the commission earned on your strata insurance policy. The exact amount depends on the agreement between your strata manager and the insurance provider. 

 How Do I Know if My Strata Manager Is Offering Rebates? 

 Start by reviewing your insurance renewal documents, agency agreement, and the disclosure provided at your last AGM. You can also simply ask your strata manager about their policy on insurance commission rebates and whether they pass any savings on to the owners’ corporation. 

Here at Jamesons we always rebate 100% of the insurance commission back to our owners corporation and have done for over 40 years!

If you’re curious to see how much you could save, get in touch with us today!

Request a Free Quote

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