Glossary
Body Corporate Insurance Glossary
Plain-English definitions for the terms you'll see on body corporate insurance schedules, valuation reports, and committee meeting agendas. New Zealand-specific.
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Body Corporate
In New Zealand, a body corporate is the legal entity automatically formed under the Unit Titles Act 2010 that owns and manages the common property of a unit-titled building. Every unit owner is a member.
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Unit Title
A unit title is a form of property ownership in New Zealand where you own a defined unit (e.g. an apartment) plus a share of the common property, governed by the Unit Titles Act 2010. It is the most common ownership structure for apartments and townhouse complexes.
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Sum Insured
The sum insured is the maximum amount an insurer will pay out for a covered claim. For body corporate building insurance in New Zealand, it is set to the estimated full replacement (reinstatement) cost of the building, including demolition, professional fees, and inflation provisions.
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Reinstatement Value
Reinstatement value is the cost to rebuild a building to its current standard, including demolition, debris removal, professional fees, and compliance with current building codes. It is the basis on which most body corporate building insurance sums are calculated.
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Indemnity Value
Indemnity value is the depreciated value of property — what it is worth today, accounting for age and wear. It contrasts with reinstatement value, which is the full cost to rebuild. Body corporate building cover is almost always written on a reinstatement basis, not indemnity.
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Excess
The excess is the amount the body corporate must pay before the insurer contributes to a claim. Body corporate policies typically have multiple excesses — a standard excess for general claims, plus separate (often much larger) excesses for natural disaster, water damage, and weathertightness claims.
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NHC Cover (NZ)
NHC (the Natural Hazards Commission Toka Tū Ake) provides automatic first-layer natural disaster cover for residential buildings in New Zealand: up to NZ$345,000 + GST per dwelling unit for damage from earthquake, volcanic activity, hydrothermal activity, landslip, and tsunami. Premiums are paid via the NHC levy on private fire insurance.
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Natural Disaster Cover
Natural disaster cover is the layer of insurance that responds to damage from earthquake, volcanic activity, tsunami, landslip, and (in most NZ policies) flood. For body corporates it sits above NHC's NZ$300K per-dwelling first layer.
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Office Bearers' Liability
Office bearers' liability cover (sometimes called committee liability or directors & officers cover for body corporates) protects committee members from personal liability for decisions made in their role on the body corporate committee. It typically responds to claims of mismanagement, breach of duty, or negligent decision-making.
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Statutory Liability
Statutory liability cover responds to fines and defence costs for unintentional breaches of New Zealand statutes by the body corporate or its committee — for example, Health and Safety at Work Act, Resource Management Act, or Building Act breaches. Deliberate breaches and certain regulatory matters are excluded.
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Long-Term Maintenance Plan (LTMP)
A Long-Term Maintenance Plan is a 10-year forward-looking maintenance schedule that body corporates in New Zealand must establish under the Unit Titles Act 2010. It records the building elements requiring maintenance, expected cost, and timing, and informs the long-term maintenance fund.
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Body Corporate Operational Rules
Operational rules are the by-laws that govern day-to-day life inside a body corporate — covering noise, pets, parking, common-area use, and enforcement. They are set by the body corporate under the Unit Titles Act 2010, with default rules supplied by the Act.
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