The Insurance Council of New Zealand (ICNZ) has urged potential or existing owners of multi-unit property to thoroughly check their property for possible insurance gaps and issues.

"If a unit is attached to other units and doesn’t have a body corporate structure in place, many insurers may not provide insurance because of complexities that can arise at claim time if not all units are insured or if they have different levels of cover from different insurers," said Tim Grafton, chief executive of the ICNZ, said in a statement.

“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.”

While high-density housing is one of the solutions to address housing shortage issues in New Zealand, it is also crucial that property owners are able to adequately protect their assets, Grafton added. He also advised owners to talk to an insurer early on to learn about the various insurance issues they may encounter.

Body corporates are often seen as extra cost and administration for owners, but they also offer a single point of insurance for the entire building, including units, shared spaces and common property. According to ICNZ, this ensures all owners have properly insured with a single insurer, making claims simpler and more efficient to handle.

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