The Insurance Expires Friday. Only One Insurer Will Quote. What Would You Do?
The scheme’s insurance expires on Friday. Several insurers have declined and only one will quote. The committee asks whether the law requires three quotes before it can decide.
The strata scheme’s insurance policy expires on Friday. The strata manager has approached the market, but several insurers have declined to provide terms. Only one insurer is prepared to provide a renewal quotation. The committee asks: “Aren’t we legally required to get three quotes?”
Which option would you choose?
- ALet the policy expire until three quotations are obtained.
- BAccept the one quotation immediately without asking any further questions.
- CDocument which markets were approached, explain in writing why fewer than three quotations were available, provide the available option and obtain the appropriate Owners Corporation decision.
- DTell the strata manager to choose whichever policy they think is best.
Choose your response before opening the practical explanation.
Reveal the practical explanation
One available quote still needs a transparent decision.
Section 166 of the Strata Schemes Management Act 2015 requires a strata managing agent proposing insurance to provide at least three quotations from different providers for each type of insurance, or to give the Owners Corporation written reasons if fewer than three are provided. The quotations or written reasons should be given as soon as practicable so the Owners Corporation can decide. The requirement supports transparency and market testing; it does not require a scheme to go uninsured when three providers will not quote.
Record the insurers or markets approached, the dates, the responses and the reasons given for declining, where available. Explain in writing why only one quotation can be provided. A single available quote should still be tested: check the scope of cover, sum insured, exclusions, excesses, conditions, expiry and any material change from the existing policy.
Present the available quotation with its base premium, commission, broker fees, government levies and applicable GST clearly identified. Show who receives any commission or broker fee, and disclose any relevant connection or interest. Ask for a clear total payable so owners can understand both the cover and the price.
The strata manager should assemble the information and explain the market position within their insurance authorisation and service scope. A valid committee decision is treated as an owners corporation decision under section 36, subject to statutory limits and any matters reserved for a general meeting. Routine committee decisions do not all require a separate delegation. A manager acting under an existing lawful delegation must check its scope and conditions under section 52. Separately check any general-meeting approval required for commission outside the terms of appointment under section 57. Record the decision or delegated action and arrange confirmation of cover before expiry.
Option A exposes the scheme to a potentially uninsured period while waiting for quotations that may never arrive. Option B skips scrutiny and disclosure. Option D assumes the manager alone has the decision authority. Option C creates a record, gives the decision-maker the available facts and protects continuity of cover.
Three quotes are a transparency rule, not a reason to let cover lapse.
A tight deadline makes a clear record more important. Market approaches, written reasons, itemised costs, authority and a timely decision let an Owners Corporation act on the one option available without pretending other quotations exist.
APPROACH THE MARKET → RECORD RESPONSES → EXPLAIN WHY FEWER THAN THREE QUOTES EXIST → DISCLOSE PREMIUM / FEES / COMMISSIONS → OBTAIN THE APPROPRIATE DECISION → KEEP THE SCHEME INSURED
STRATA IQ takeawayTransparency matters. Good decisions still need to be made. How is easy when you know the why.
NSW renewal and authority wording reviewed 21 October 2026 against the current Strata Schemes Management Act 2015, sections 36, 52, 57, 60 and 166, the Property and Stock Agents Regulation 2022, Schedule 12 section 6 and Schedule 1 section 11, and NSW Fair Trading guidance. Legal duties are distinct from practical checks. General NSW education; check the policy, agreement, authority and scheme circumstances. No Queensland rule or proposed reform is presented as current NSW law. The artwork’s April 2025 calendar is illustrative, not the scenario date.
- NSW legislation — Strata Schemes Management Act 2015, section 166 ↗
- NSW Act — committee powers, section 36 ↗
- NSW Act — manager delegation, section 52 ↗
- NSW Act — commission permission and disclosure, sections 57 and 60 ↗
- NSW Regulation — independent insurance purchase and conflicts ↗
- NSW Government — Managing strata finances and insurance ↗
- NSW Fair Trading — Disclosure requirements for strata managing agents ↗
Turn the explanation into practice.
Open the linked Guide or Academy pathway when you need the complete checks, official sources and practical learning.