When Does a Specialist Broker Add Value?
Direct insurers like NRMA are excellent for standard residential homes. They offer competitive pricing, strong customer service, and straightforward online processes that work well for typical single-dwelling properties.
However, blocks of units have different requirements. Multi-dwelling properties may need higher sums insured, specific property classifications, and coverage structures that aren't always available through standard online portals. This is where a specialist broker can help bridge the gap.
Understanding Sum Insured Limits
Most direct-to-consumer platforms, including many online portals, have maximum building sums insured of approximately $2,000,000. This works perfectly for the majority of standard residential homes they're designed to serve.
However, if your six or eight unit block requires $3M or $4M in coverage to reflect actual construction costs, demolition fees and professional requirements, a $2M policy limit may not provide adequate protection. It's important to ensure your sum insured reflects the true replacement cost of your property.
Why Property Classification Matters
Many blocks of units physically resemble large houses from the street, which can make selecting the right insurance category confusing. If a property is insured under a standard residential home classification when it's actually a multi-unit investment property, this mismatch could potentially affect claims.
A specialist broker can help ensure your property is classified appropriately from day one, reducing the risk of complications down the track.
Real World Scenarios: NRMA to Specialist Transitions
Case Study: Correcting a $2.4M Valuation Shortfall
The Problem:
- The property was insured for $1.6M against a realistic replacement cost of $4,000,000
- The property was classified as a "Free Standing Home" rather than a "Block of Units"
- The $2M portal cap prevented adequate coverage regardless of the owner's intentions
The Solution:
Tank engaged specialist underwriters CHU and CGU who have the technical expertise to underwrite multi-unit risks. Coverage was secured at the full $4,000,000 valuation with correct "Block of Units" classification.
Adjusted Premium: $12,000 to $18,000 (reflecting actual asset value and risk profile)
Outcome: The client closed a $2.4M underinsurance gap. In the event of a total loss, they would now receive funds to actually rebuild, rather than facing a shortfall of millions.
Case Study: Eight-Unit Block Exceeds Direct Insurer Capacity
The Problem:
- NRMA's $2M ceiling could not accommodate the $2.8M valuation required
- Mass-market insurers such as Blue Zebra declined the risk entirely due to the number of units
- The owner faced potential non-renewal with no clear path forward
The Solution:
Tank placed the risk with SGUA, a specialist in landlord and multi-unit properties. Coverage was secured at the full $2,800,000 with correct property classification.
Final Premium: Approximately $9,000
Outcome: The client moved from an underinsured position with a direct insurer to full protection through a specialist underwriter, with an $800,000+ coverage increase.
NRMA vs Tank Insurance: Service Model Comparison
| Feature | NRMA (Direct) | Tank Insurance (Broker) |
|---|---|---|
| Maximum Sum Insured | Capped at approximately $2M | $3M, $4M or higher via specialist markets |
| Property Classification | Standard residential categories | Specialist multi-unit property classifications |
| Underwriting Approach | Automated online system | Manual review by specialist underwriters (CHU, CGU, SGUA) |
| Claims Handling | Deal directly with insurer, multiple contacts | Dedicated broker advocates on your behalf |
| Annual Review | Auto-renewal at same terms | Proactive market review to ensure competitive terms |
| Multi-Unit Expertise | Limited; designed for standard homes | Specialist knowledge of strata and landlord risks |
| Renewal Certainty | May decline to renew complex risks | Access to multiple markets if one insurer exits |
Understanding Premium Differences
Premium differences between policies often reflect differences in coverage levels rather than value for money. When comparing quotes, it's important to look beyond the price:
- A lower premium with a $1.6M sum insured provides less coverage than a higher premium with $4M coverage
- The right policy matches your actual replacement cost, ensuring you can rebuild if needed
- Higher premiums for multi-unit properties typically reflect the increased value and complexity of the asset
The key is ensuring your sum insured reflects the true replacement cost of your property. An accurate valuation protects you from being underinsured at claim time.
Claims Support: Direct vs Broker
With a direct insurer like NRMA, you manage the claim process yourself through their claims team. NRMA has a solid reputation for customer service, and many policyholders navigate this process successfully.
With a broker like Tank Insurance, you have an additional layer of support. We handle insurer communications on your behalf, help document your claim properly, and work to ensure timely resolutions. You have a single point of contact who understands your policy and your property throughout the process.
When Is NRMA the Right Choice?
NRMA is well-suited for many property owners, particularly those with:
- Standard residential homes or investment properties within typical value ranges
- Properties that fit comfortably within online portal parameters
- Straightforward insurance needs without complex multi-unit structures
- A preference for direct self-service with a well-established insurer
NRMA has built a strong reputation over many decades and offers competitive pricing for properties that fit their standard criteria. Their customer service is generally well-regarded in the industry.
When Does a Broker Add Value?
A specialist broker like Tank Insurance may be helpful when:
- Your property requires a sum insured above $2M
- You own a multi-unit block that doesn't fit standard residential categories
- You want someone to review your coverage annually and compare markets
- You prefer dedicated claims support and a single point of contact
We conduct annual market reviews for every client, assessing your current valuation, checking for better terms across multiple insurers, and ensuring your policy evolves with your asset.