Allied Health Mixed-Use, Owner-Occupied

A property owner contacted us looking for mixed-use property insurance on an inner-metro building from the late 1990s. The property was a genuine mixed-use setup: one small allied health tenancy on the commercial side and an owner-occupied residential apartment above.

The residential portion was larger than the commercial area - roughly 80 square metres of living space versus around 60 square metres for the clinic. Construction was standard: double brick walls, Colorbond roof, timber and vinyl flooring. The building had solid security and fire protections including smoke alarms, fire extinguishers, fire blankets, deadlocks, window locks, and a burglar alarm.

On paper, this looked like a reasonable risk. Building sum insured sat around $800,000 with contents around $40,000. The owner also had planned non-structural renovations in the pipeline, including fire-proofing improvements estimated at around 2-3 months of works.

Their premium expectation was around $2,200 - benchmarked against standard home or landlord insurance premiums.

We identified early that this wasn't a standard residential or landlord insurance placement. The dual occupancy meant it needed to go to commercial markets with appetite for split-use risks.

We prepared a detailed submission covering the occupancy split, owner-occupied status, commercial tenancy type, construction details, safety protections, and planned renovations, then approached multiple insurers:

• AIG - Declined
• Allianz - Declined
• Chubb - Declined
• Vero - Declined
• Zurich - Declined
• CGU - Quoted at approximately $4,000
• Hollard Commercial - Quoted at approximately $6,500
• QBE - Quoted at approximately $9,000+

The quality of the fact find mattered here. We captured the exact occupancy split, construction type, all fire and security protections, contents breakdown, and the scope and timing of planned renovations. That level of detail is what gives underwriters enough confidence to quote on non-standard files.

The biggest challenge was the sheer number of declines from well-known insurers. Five major markets passed on this risk - not because the property was high-hazard, but because it sat outside their standard residential and commercial categories.

A physio clinic is about as low-risk as commercial tenancies get. No cooking equipment, no flammable materials, professional clientele. But the mere presence of dual occupancy was enough to trigger declines across multiple markets.

The planned renovations added another layer. Even though the works were non-structural and included fire-proofing improvements that would ultimately benefit the risk profile, they still needed to be disclosed and factored into the placement.

There was also a significant gap between the owner's premium expectation of around $2,200 and what the market actually delivered. That's a common issue with mixed-use properties - owners benchmark against standard home or landlord premiums, but once there's a commercial element, pricing shifts materially.

We secured three viable quoting options despite the five declines. The available premiums ranged from approximately $4,000 through to more than $9,000 - a spread of over $5,000 on the same risk.

This case is a good example of how sharply pricing and insurer appetite can shift once a property becomes genuinely mixed-use - even when the commercial tenant is low-hazard and the residential portion dominates. The difference between the cheapest and most expensive quote was more than $5,000, which shows why comparing across markets matters.