Insuring a Block of Units in Australia: What You Need to Know

In this blog, we’ll explore:

• Why block–of–units insurance is harder to secure today

• The risks of inadequate coverage

• How Morgan Insurance Brokers approach can provide a better solution

• Practical advice for landlords, especially self-managed ones

Why Major Insurers Are Withdrawing or Restricting Coverage

Rising risk, increasing losses, and underwriting pressure

Australia has seen a rise in extreme weather events, inflation in rebuilding costs, supply chain pressures and growing claims severity. The insurance industry has responded by tightening underwriting and reassessing which property risks are sustainable to insure.

Because blocks of units represent aggregated risk (a single event such as a fire, storm, water damage etc, can affect multiple tenancies at once), insurers are more cautious. In some cases, insurers may decline to quote new policies or withdraw from offering cover altogether.

Anecdotal reports of insurers opting out of block insurance

In property forums and discussions, some landlords have reported that insurers like NRMA and RACQ have ceased insuring blocks of units owned by single owners (i.e. non-strata blocks). For example:

“We’ve just found out that NRMA will no longer insure blocks of units that are owned by a single owner and that aren’t strata-ed. … It looks like slim pickings for insurers who insure this type of property.” (PropertyChat)

While such reports are not always publicly confirmed by the insurer, they reflect a reality: for certain high-risk or complicated multi-unit configurations, insureds are seeing fewer options.

Insurers dropping some product lines

In broader insurance markets, some insurers have publicly announced that they will no longer offer certain personal lines (e.g. home, landlord) for new business.

So, for many owners of blocks of units, especially non-strata blocks, finding an insurer willing to quote can be challenging. That’s where a broker with access to specialist markets becomes crucial.

The Risks of Being Underinsured or Uninsured

If your block of units is not properly insured, you could face:

• Rebuilding or repair costs after fire, storm, water damage, etc., which can run into the hundreds of thousands (or more)

• Loss of rental income if the property becomes uninhabitable during repair

• Liability claims (slip/trip, injury on premises)

• Tenant damage or malicious damage (if tenants or their visitors damage common walls, structures, or interiors)

• Rent default or non-payment risks if tenants stop paying during repair works or due to insurance issues

Given that insurers are less eager to cover multi-unit risks, going without appropriate coverage—or settling for narrow or inadequate cover—can leave you severely exposed.

Morgan Insurance’s Solution: One Policy, Flexible Options

Morgan Insurance Brokers offers a model tailored to block–of–units owners that addresses many of the pitfalls in today’s market.

1. One comprehensive policy covering multiple risks

Instead of patching together separate policies (building, landlord, public liability etc.), Morgan Insurance Brokers can source a single policy that can incorporate:

• Building / structural cover

• Landlord cover (for tenant-related risks)

• Public liability

• Optional covers (loss of rent, tenant damage, rent default, etc.)

2. Competitive pricing via broad panel access

Because Morgan can access a panel of insurers, it can shop the risk across multiple underwriters, negotiate terms, and offer clients competitive pricing even in a tough underwriting environment.

3. Optional landlord covers

One valuable feature is that optional landlord covers are not mandatory. The policy can be tailored to remove some landlord related extras if you prefer (to reduce premium.

For example, you might choose not to include rent default or theft-by-tenant coverage if you believe your tenants are low risk, or wish to reserve that cover for only certain units, but you retain the flexibility to include them if needed.

4. Claims handling by Morgan Insurance Brokers

Having a broker manage claims can make a big difference during a stressful event. Morgan offers to take on claims handling responsibilities,  helping with documentation, liaising with insurers, and advocating for a fair outcome.

5. Emphasis on solid supporting documentation

Morgan underscores the importance of:

• Having formal rental/tenancy agreements in place (so tenant-based claims like rent default or damage are valid)

• Inspection reports (especially for self-managed blocks) to document condition, pre-existing damage, maintenance issues, etc.

These pieces of documentation strengthen any claim and reduce insurer pushback.

Tips for Landlords (Especially Self-Managed Blocks)

Here are some practical tips to protect yourself and your investment:

1. Use legally sound tenancy agreements
   Ensure they clearly set out tenant obligations, damage responsibilities, and allow for entry/inspection rights. This is especially critical if you rely on rent default, tenant damage or malicious damage covers.

2. Perform regular inspections and document them
   Carry out periodic inspections (with photos, condition reports) so you have an evidentiary trail of property condition. This helps in claims disputes, or where damage is alleged.

3. Engage professionals for valuation and rebuilding cost estimation
   Rebuilding a block of units is a complex exercise; use qualified valuers, architects or quantity surveyors to estimate appropriate sums insured.

4. Be selective with optional covers
   Do you need rent default, theft by tenant, loss of rent, or accidental damage by tenant? Weigh the incremental premium cost vs risk. If your tenants are stable and you have strong screening, you might choose to forgo some optional covers — but only if you’re willing to assume that risk.

5. Maintain good maintenance & risk mitigation practices
   Keep gutters cleaned, check plumbing, mitigate water ingress, maintain fire systems and safe access. Insurers often scrutinise upkeep in claims.

6. Review your policy annually
   As repair costs, materials or risks shift, make sure your sums insured and covers remain adequate.

Why Our Approach Stands Out

• Access to multiple insurers means you aren’t dependent on a single underwriter who may opt out of block–of–units risks

• Package structure avoids coverage gaps or overlaps

• Flexibility in optional landlord covers helps manage cost vs risk

• Broker-managed claims provides support and advocacy when you need it most

• Emphasis on documentation (agreements, inspections) increases claim defensibility

In a market where some major insurers are retreating from landlord or home lines (or excluding certain risks), having a broker partner with a wide panel and specialist block–of–units capability is a strong advantage.

Conclusion

If you own or manage a block of units in Australia, particularly a non-strata block, you’re operating in a more constrained insurance environment today. Many general insurers are reevaluating their exposure to multi-unit risks, making coverage harder and more expensive to obtain.

That’s why a broker model like Morgan Insurance Brokers, which consolidates multiple covers into one policy and leverages multiple insurer relationships, can make a real difference. You gain competitive pricing, flexibility to tailor landlord options, and claims support, without needing to juggle separate building and landlord policies yourself.