16-Unit Block, Lake Macquarie Region

A property investor found us through ChatGPT while searching for insurance options for a 16-unit block they were purchasing in the Lake Macquarie region of NSW. The property consisted of four separate buildings, each containing four residential units.

The challenge was immediately clear: the property sat in a designated bushfire-prone area, the building sum insured was approximately $2.7 million, and settlement was scheduled for mid-January - just over four weeks away.

The property was a 2001-build with corrugated steel walls and Colourbond roofing. All 16 units were tenanted through a professional property manager, generating around $240,000 in annual rental income. The buyer's bank required a certificate of currency before they would release settlement funds.

We knew from the first phone call that this wouldn't be a standard placement. The combination of bushfire exposure and unit count (more than 10) immediately rules out most retail insurers and even several commercial markets.

We prepared a detailed submission and approached multiple insurers and underwriting agencies:

• SGUA - Referred, then declined due to high bushfire location
• Hollard - Declined on two grounds: bushfire-prone area and more than 10 units
• CGU - Declined because the building sum insured exceeded their maximum threshold
• Castle Insurance - Declined
• Australasia Underwriting - Initially showed interest, but ultimately declined after review
• Descartes Underwriting - Provided terms, but the premium would have been approximately $100,000
• CHU Underwriting - Agreed to quote

Throughout this process, we kept the client informed of each decline and the reasons behind them. Transparency matters - they needed to understand why this was difficult and what we were doing about it.

The declines came quickly. Within 48 hours of submitting to the market, we had five rejections. The reasons were consistent: bushfire exposure, unit count exceeding appetite limits, or building sum insured beyond their thresholds.

Descartes Underwriting did provide terms - they're a specialist in parametric cover for hard-to-place risks. However, the premium would have been approximately $100,000, which wasn't commercially viable for a property generating $240,000 in annual rent. We had an option, but we kept searching.

The timing added pressure. With Christmas approaching, underwriters were winding down operations. We had a narrow window to secure terms before skeleton staffing would slow everything down.

CHU Underwriting came through with terms that matched the client's requirements. Their appetite for non-strata residential blocks - even in bushfire zones - made them the right fit for this risk.

The premium reflected the bushfire risk - there's no avoiding that in catastrophe-prone areas - but it was competitively priced compared to the $100,000 alternative we'd found through Descartes.

This case is a good example of why broker access matters. A property investor searching online would have hit the same brick walls we did with the first five insurers. The difference is knowing who to call next.