Are we paying too much for insurance brokerage?

Hi,

I just have a question on strata insurance and broker fees.

I live in a block of three units with two other owner-occupiers. We do not employ a strata manager and just handle maintenance ourselves. Our annual strata insurance premium with CHU went up over 10 percent this year, after being pretty flat last year. We use a broker called Edgewise. The premium is about $2230, which includes the broker’s commission. We asked the broker how much his commission is. He said their commission is $323 — which is about 14.5 percent of the total premium.

He justified the 10 percent annual hike in the premium to “a hardening market”, and said the next best deal for strata insurance would cost well over $3000.

So I have three questions:

1) Does this seem a reasonable amount to pay for very vanilla insurance for three units?

2) Is 14.5 percent a reasonable amount for brokerage?

3) Can we avoid using a broker and just go direct to the insurer?

Cheers,

Razza