We Got 5 Insurer Declines on a Mixed-Use Property - Here's What Actually Happened

Key Takeaways:

• Five major insurers declined a mixed-use property with a low-hazard allied health tenant and owner-occupied residential apartment
• The quotes that came back ranged from roughly $4,000 to more than $9,000 for the same risk
• The property owner originally expected to pay around $2,200 - less than half the cheapest available option
• Even non-structural renovations and fire-proofing works can affect underwriting on mixed-use risks

The owner expected a premium around $2,200. The cheapest quote that actually came back was nearly double that. And the most expensive? More than four times what they had in mind.

That’s the reality of mixed-use property insurance in 2026. Not because the property was unusual or run-down - but because it sat outside the standard categories most insurers work with.

Here’s the full case, with the numbers.

What Was the Property?

The property was an inner-metro mixed-use building from the late 1990s. Standard construction - double brick walls, Colorbond roof, timber and vinyl flooring. Nothing exotic.

It was split between two uses:

• Residential - an owner-occupied apartment, roughly 80 square metres, with around 3 bedrooms and 3 bathrooms
• Commercial - a small allied health tenancy (professional healthcare use), roughly 60 square metres

The residential portion was larger than the commercial side. The owner lived in the apartment and leased the commercial space. Building sum insured sat around $800,000 with contents around $40,000.

Security and fire protections were solid: smoke alarms, fire extinguishers, fire blankets, deadlocks, window locks, and a burglar alarm. On paper, this looked like a reasonable risk.

Why Did So Many Insurers Decline?

Five major insurers declined this property outright. That’s not a typo. Five.

The reason comes down to classification. Most insurers run separate residential and commercial underwriting teams. A property that’s both creates a risk profile that doesn’t fit either system cleanly. We’ve covered this in detail in our guide on why mixed-use buildings are harder to insure.

But here’s what catches people off guard: the declines weren’t because the property was high-risk in any obvious way. The construction was standard. The security was good. The commercial use was a professional healthcare tenancy - about as low-hazard as it gets.

The problem was simply that the property was mixed-use. That alone was enough for multiple major markets to pass.

Does the Type of Commercial Use Actually Matter?

Yes. But not always in the way you’d expect.

A physio clinic or allied health practice is a very different underwriting proposition to a restaurant, takeaway shop, or mechanic. Lower fire exposure, lower public liability risk, professional clientele. On a pure hazard basis, it’s one of the better commercial uses you could have in a mixed-use building.

And yet - multiple insurers still declined.

That’s the part worth understanding. Mixed-use itself can narrow insurer appetite significantly, regardless of whether the commercial tenant is high-risk or not. The dual occupancy classification is often the trigger, not the specific business operating downstairs.

We see this pattern regularly across our mixed-use property insurance placements. Even where the commercial use is professional, quiet, and low-hazard, the file still sits outside standard appetite for many markets.

How Wide Was the Pricing Gap?

This is where the numbers get interesting. Among the insurers that did quote, the spread was massive:

Insurer Response	Approximate Premium
5 major insurers	Declined
Insurer A	~$4,000
Insurer B	~$6,500
Insurer C	~$9,000+

Same property. Same risk profile. Same sum insured. And the pricing ranged from roughly $4,000 to more than $9,000.

That’s a gap of over $5,000 between the cheapest and most expensive option. On an $800,000 sum insured, that’s a meaningful difference.

And remember - the owner’s initial expectation was around $2,200. That figure was probably benchmarked against standard home or landlord insurance premiums. Understandable, but once there’s a commercial component in the building, pricing can shift materially and standard online options often fall away entirely.

We often see mixed-use property owners underestimate pricing because they compare it to standard home or landlord insurance. But insurer appetite and pricing can move significantly once there’s a commercial element involved.

What About Planned Renovations?

This property also had planned non-structural renovations in the pipeline, including fire-proofing and fire-related improvements. The works were estimated at around 2-3 months.

For a standard residential property, that might not move the needle much. But for a mixed-use risk, even relatively modest works become relevant to underwriting.

Here’s why:

• Timing matters - whether coverage is being sought before, during, or after the works can change how the risk is assessed
• Scope matters - structural versus non-structural makes a difference, but both need disclosure
• Use changes matter - if the renovations alter how the building is occupied or used, that’s underwriting-relevant

The fire-proofing improvements were actually a positive for the risk profile long-term. But they still needed to be disclosed and factored into the placement. That’s the kind of detail that matters when you’re working with commercial property insurers on non-standard files.

What Made the Difference in Getting Quotes?

Three things.

1. Presenting the occupancy split clearly. The fact that residential was the larger portion of the building mattered. Some insurers are more open to mixed-use risks where the residential component remains dominant. Getting that detail across early made a difference.

2. Detailing the construction, security, and fire protections. Double brick walls, Colorbond roof, smoke alarms, fire extinguishers, fire blankets, deadlocks, window locks, burglar alarm - all of it. On non-standard files, the quality of the fact find directly affects whether an underwriter can say yes.

3. Taking it to the right markets. This wasn’t a file for standard personal-lines insurers or online comparison sites. It needed to go to commercial markets with appetite for split-occupancy risks. That’s where having broker access to the right panels matters.

We helped by identifying early that this wasn’t a standard home or landlord insurance placement. Once we clarified the occupancy split, owner-occupied status, commercial tenancy type, construction details, safety protections, and planned renovations, we were able to approach the right markets and secure viable quoting options - despite the multiple declines.

Frequently Asked Questions

Is mixed-use property insurance more expensive than standard landlord insurance?

Generally, yes. Mixed-use properties sit outside standard residential and commercial categories, which narrows the available market. Fewer quoting insurers typically means higher premiums. In this case, the cheapest option was nearly double what a comparable standard property might have cost.

Can I insure a mixed-use property through an online comparison site?

Usually not for genuine mixed-use risks. Most online platforms and comparison sites are built around standard home, landlord, or straightforward commercial categories. Once a property has dual occupancy, you’ll typically need a broker with access to specialist or commercial markets.

Does the size of the commercial area affect my insurance options?

It can. Some insurers are more open to mixed-use risks where the residential portion is the dominant use. In this case, the residential area was larger than the commercial side, which likely helped keep some options open. But it didn’t prevent five insurers from declining.

Do I need to tell my insurer about planned renovations?

Yes - even non-structural works should be disclosed. Renovations can affect how the risk is assessed, especially on mixed-use properties where the underwriting is already non-standard. Fire-proofing improvements, room additions, and changes to building use are all relevant.

Why do quotes vary so much between insurers for the same mixed-use property?

Each insurer has its own appetite, pricing models, and risk tolerance for mixed-use risks. The spread we saw on this property - from roughly $4,000 to more than $9,000 - isn’t unusual. It reflects how differently insurers view the same split-occupancy risk profile.

Getting the Right Cover for a Mixed-Use Property

Mixed-use property insurance isn’t something you can sort out with a quick online quote. The market is narrow, pricing varies wildly, and the details of your specific property - occupancy split, construction, tenant type, planned works - all affect what’s available.

If you own a mixed-use property and you’ve been declined, quoted something that feels too high, or you’re just not sure where to start, get in touch. Tank Insurance specialises in mixed-use property placements and we deal with these files regularly.

Reach out to our team at 02 9000 1155 or [email protected].

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This is general information only. It doesn’t take your specific situation into account. Always read your Product Disclosure Statement and policy wording, and get advice for your circumstances.