How Much Does Block of Units Insurance Cost in Australia?
A duplex or triplex generally costs $1,500 to $4,000 a year to insure. Here's what actually drives the premium on a non-strata block of units, and why.
The cost of block of units insurance for a duplex or triplex generally runs $1,500 to $4,000 a year. A larger non-strata block insured for $3 million or more generally costs $10,000 to $30,000 a year. The number that matters most for that premium isn’t how many units you own. It’s typically what the building would cost to rebuild.
$1,500 to $4,000
typical annual premium for a duplex or triplex
$10,000 to $30,000+
typical annual premium for a larger block insured at $3 million or more
Rebuild cost
what actually sets your premium, not market value
What determines the cost of block of units insurance?
The building’s sum insured is the biggest single factor. That’s followed by the number of dwellings, the property’s location, its age and construction, your claims history and whether you add loss of rent and rent default cover.
Building sum insured
What it would cost to rebuild the whole structure today, not what it would sell for.
Location and hazard zone
Cyclone, flood and bushfire prone areas generally attract higher premiums.
Age and construction
Older buildings and some construction types can cost more to rebuild per square metre.
Loss of rent and rent default
These are options you add to the policy, and each one adds to the premium.
Why does sum insured matter more than the number of units?
Because two blocks with the same number of dwellings can cost very different amounts to insure. A six unit block on a large block of land in a capital city can have a market value well above what it would actually cost to rebuild the structure itself, or the other way around if construction costs in the area are high. Insurers price the policy against the rebuild figure, not the sale price.1
Market value and rebuild cost are two different numbers. Rebuild cost is typically the bigger driver of your premium.
Does a duplex cost less to insure than a larger block?
Generally yes, because a duplex usually has a lower total rebuild cost than a ten unit block. But that’s a consequence of the sum insured being lower, not a direct discount for having fewer units. If a duplex sits on a large footprint with expensive finishes, it can cost more to insure than a larger but more modestly built block.
What happens if my block of units is underinsured?
If the sum insured doesn’t reflect the true rebuild cost, insurers can apply average provisions that reduce a claim payout proportionally. This is standard practice across most building insurance in Australia, not something unique to non-strata blocks, and it’s one of the more common ways property owners end up underinsured without realising it.2
Why do premiums vary so much by location?
Properties in cyclone, flood or bushfire prone regions generally attract higher premiums, because the insurer’s expected claims cost in that area is higher. Two otherwise identical buildings can have noticeably different premiums depending on where they sit, and this is one of the harder factors to change once you own the property.
What information do insurers need to quote block of units insurance?
Insurers typically ask for the property address, the number of dwellings, the building sum insured, current tenancy arrangements and annual rental income, whether loss of rent and rent default cover is required and any recent claims or insurer decisions.3 The more accurately this is presented, the more accurately the quote reflects the actual risk.
I only own one rental property. Does this apply to me?
No. A single rental property is priced very differently, based on that one property’s rebuild cost and rental income rather than an aggregated risk across multiple tenancies. If that’s your situation, landlord insurance for single dwellings is the relevant product instead.
- A duplex or triplex generally costs $1,500 to $4,000 a year to insure. A larger block insured at $3 million or more generally costs $10,000 to $30,000 a year.
- The building's sum insured, meaning rebuild cost, is the biggest factor. It's not the same number as market value.
- Location, construction, claims history and whether loss of rent and rent default are included all move the premium up or down.
- Underinsurance can reduce a claim payout proportionally, regardless of how many dwellings are on the title.
- If you own a single rental property rather than a block, a different product applies.
If you want an accurate figure for your specific property, Cipher can review it and go to our specialist panel on your behalf. Get in touch.
The information in this article is general in nature and does not constitute legal, financial or insurance advice. Please speak with a qualified adviser about your specific circumstances.
Footnotes
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Choosing home insurance, ASIC MoneySmart ↩
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Know your worth and avoid underinsurance, Insurance Council of Australia ↩
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Insurance explained, Insurance Council of Australia ↩
Frequently asked questions
How much does block of units insurance cost in Australia?
A duplex or triplex generally costs $1,500 to $4,000 a year to insure. A larger non-strata block insured for $3 million or more generally costs $10,000 to $30,000 a year. These are general market ranges only, and an underwriter needs to assess your specific property for an accurate figure.
What is the single biggest factor in the cost of block of units insurance?
The building's sum insured, meaning what it would actually cost to rebuild, not what the property would sell for. A block on an expensive block of land can have a high market value but a much lower rebuild cost. Rebuild cost is typically the biggest single factor in the premium, though location, construction and claims history also play a part.
Does a duplex cost less to insure than a ten unit block?
Generally yes, because a duplex usually has a lower total rebuild cost than a larger building. But it's the sum insured driving that difference, not the unit count on its own. Two buildings with the same number of units can have very different premiums if one costs more to rebuild.
What happens if my block of units is underinsured?
If the sum insured doesn't reflect the true rebuild cost, insurers can apply average provisions that reduce a claim payout proportionally. This is standard practice across most building insurance in Australia, not something specific to non-strata blocks.
Why do premiums vary so much by location?
Properties in cyclone, flood or bushfire prone regions generally attract higher premiums, because the insurer's expected claims cost in that area is higher. The same building can cost noticeably different amounts to insure depending on where it sits.
What information do insurers need to quote block of units insurance?
Insurers typically ask for the property address, the number of dwellings, the building sum insured, current tenancy arrangements and annual rental income, whether loss of rent and rent default cover is required and any recent claims or insurer decisions.
I only own one rental property. Does this apply to me?
No. A single rental property is priced very differently, based on that one property's rebuild cost and rental income rather than an aggregated risk across multiple tenancies. Landlord insurance for single dwellings is the relevant product instead.
Questions about your cover?
Cipher can review your current position and explain what you actually have.
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