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Insurance Council warns owners of units in complexes without body corps could struggle to get cover or face uphill battles when making claims

by Jenée Tibshraeny


The Insurance Council of New Zealand is warning of the risks associated with buying a unit attached to other units in a building or complex that doesn’t have a body corporate.

The industry group’s CEO, Tim Grafton, said insurers may not provide cover in this situation because complexities can arise at claim time if some units in the complex are uninsured or have different levels of cover.

He said that while body corporates can be seen as adding extra cost and administration for owners, they offer a single point of insurance for the entire building, including units, shared spaces and common property.

Having everything covered by one insurer means claims can be handled simply and efficiently.

Often when more than one insurer is involved, shared spaces and common property don’t end up getting covered.

"Ultimately it can lead to a really nasty experience for owners - especially following a significant event that causes wide damage that isn’t insured,” Grafton said.

"Uninsured or underinsured units can cause repair delays, impacting on everyone’s ability to pick up the pieces and get back to normal."

The Insurance Council suggested those looking to buy within a multi-unit building, a multi-unit complex (multiple buildings), or a property that is attached to others, tell their insurer before they go unconditional.

"This means you can have a robust conversation about the type of property and what level of cover the insurer may offer to best to meet your needs - enabling you to make an informed decision to proceed with the purchase or not, and avoid possible pitfalls," Grafton said.

"Don’t get caught up in sales pitch from developers or agents. Properties are sometimes marketed as being body corporate-free to save owners time and money - but the ultimate outcome is that it won’t…

"Owning your own home is increasingly difficult for New Zealanders and we want to ensure buyers aren’t tripped up by steps to make properties appear more affordable when they could actually cause more expense in the future.

"With high-density housing one of the solutions to address New Zealand’s housing availability and affordability it is critical that property owners are able to appropriately protect their assets.”

This story was originally published on and has been republished here with permission.