BLOCK OF UNITS CASE STUDY
6-Unit Block, Inner-West Sydney
Online portals capped out at $2M. The property needed $4M cover. Here's how we found options.
THE SITUATION
A property owner contacted us after struggling to get quotes online for their 6-unit block in Sydney's inner west. The property - a 1970s double brick building with six two-bedroom units - was generating around $2,400 per week in rent.
The owner had an existing policy with a mainstream direct insurer at $1.6 million building sum insured, but knew this was inadequate. After factoring in demolition costs, professional fees, and current construction prices, the realistic replacement cost was closer to $4-5 million.
The problem: every online insurance portal they tried capped building sum insured at $2 million. They couldn't even get a quote for the cover they actually needed.
There was another complication - the property presented as a freestanding house from the street, making it difficult to categorise correctly in online quote systems.
OUR APPROACH
This is a common issue with blocks of units. Direct insurers and online portals are designed for standard residential properties. Once you exceed their sum insured thresholds or have an unusual property configuration, you're outside their automated systems.
We submitted to seven insurers and underwriting agencies. Two markets we ruled out early because we knew they cap at four units - going to them with a six-unit block wouldn't reflect well. Of the remaining submissions:
- Three mainstream markets declined on sum insured grounds - $4M sat outside their appetite
- SGUA - Quoted around $14,800 (indicative, subject to property valuation)
- CGU - Quoted around $12,600 (referred and approved)
- CHU Underwriting - Quoted around $18,000 (referred and approved)
Multiple declines, three viable options. That's the difference broker market access makes.
THE CHALLENGES
The $4 million sum insured was the main barrier. Three mainstream markets declined because the sum sat outside their thresholds. The markets we'd ruled out for unit-count reasons wouldn't have helped either.
The SGUA quote came with conditions: they needed a property valuation report less than two years old, plus evidence that some balcony cracking had been repaired. These are the kinds of underwriting questions that don't surface in online quote forms - they only emerge when a human underwriter reviews the submission.
CGU initially indicated a premium above $18,000, but after negotiation and providing additional property details, we secured approval at around $12,600.
THE OUTCOME
We presented the client with three competitive options at the full $4 million building sum insured - something they couldn't achieve through any direct channel.
The CGU quote at around $12,600 represented significant value: comprehensive cover at nearly triple the sum insured of their existing direct insurer policy.
The key insight here is about underinsurance. Many block owners are sitting on policies with inadequate sums insured because that's all they could get online. The real cost isn't the premium difference - it's the gap between what's covered and what it would actually cost to rebuild.
This case demonstrates why high-value blocks of units need broker placement. The automated systems aren't built for these properties.
QUESTIONS FROM THIS PLACEMENT
Frequently Asked Questions
01What if my building needs a higher sum insured than online insurers allow?
02How much does insuring a $4M six-unit Sydney block cost?
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