Brokers are developing strategies to combat body corporate managers who take insurance business from them.

They are contacting owners direct to argue their case after receiving notification that a manager has taken over an insurance placement – and the commission.

But peak organisation Strata Community Australia says body corporate managers have been dealing with insurers since strata title was invented. It says there is full disclosure and commissions provide compensation for managers’ time when there is a claim.

Insurance Advisernet Australia Account Manager Morgan Jones told insuranceNEWS.com.au there is a conflict of interest in strata managers acting for insurers.

He says the managers cannot provide independent advice or the service clients need when making a claim. They may also not tell the owners they are locked into one insurer.

When Mr Jones has complained to insurers, he says they tell him they are required to respond to a letter of appointment from a manager.

Strata Insurance Solutions strata specialist Tyrone Shandiman says he deals only with active body corporates and develops relationships with owners so he can speak directly to them if a manager takes over the insurance.

He and Mr Jones say owners are often unaware of the change and later reverse the manager’s decision.

Strata Community Australia CEO Mark Lever says managers spend considerable time on claims, even if a broker is involved, because they know their buildings better than anyone.

“The manager will play a significant role in that, at a significant cost to the management,” he told insuranceNEWS.com.au.

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