Quick Answer

Body corporate insurance covers the building structure, common areas, and shared facilities of a unit title development. Contents insurance covers the personal belongings and owner-installed fixtures inside individual units. Under the Unit Titles Act 2010 (Section 135), the body corporate must arrange and pay for building insurance; individual unit owners must separately arrange their own contents insurance.

This distinction matters because many unit owners assume the body corporate policy protects everything inside their home. It does not. If your television is stolen, your furniture is damaged in a flood, or your appliances are destroyed in a fire, the body corporate policy will not pay for those losses — only a separate contents policy will.

What Body Corporate Insurance Covers

The body corporate is legally required under Section 135 of the Unit Titles Act 2010 to insure the building on a full reinstatement and replacement basis. This covers:

  • Building structure — walls, roof, floors, and foundations of the entire development
  • Common property — lifts, lobbies, corridors, car parks, pools, gardens, and other shared areas
  • Reinstatement costs — demolition, professional fees, and resource consent costs required to rebuild
  • Public liability — protects the body corporate against third-party injury or property damage claims arising from the common areas
  • Loss of rent — typically up to $25,000 for residential properties where a unit becomes uninhabitable
  • Landlord's fittings — typically up to $5,000, covering fixed fittings that were part of the original build specification

What "Original Build Specification" Means

The body corporate policy covers fixtures as they were when the building was originally constructed. If a unit owner has subsequently renovated their kitchen, added a heat pump, or upgraded the bathroom, those improvements are generally the owner's responsibility — not the body corporate's.

What Contents Insurance Covers

Contents insurance is arranged and paid for by individual unit owners. It protects what the body corporate policy does not — the personal and moveable items inside the unit, plus anything the owner has added or improved since original construction. This typically includes:

  • Personal possessions — furniture, appliances, clothing, and electronics
  • Owner-installed fixtures and fittings — items installed by the owner beyond the original build specification
  • Improvements made by unit owners — kitchen renovations, bathroom upgrades, added joinery or cabinetry
  • Temporary accommodation — costs incurred if the unit becomes uninhabitable due to an insured event

Renters vs Owners

If you are a tenant renting a unit within a body corporate development, contents insurance is even more important. You have no stake in the body corporate and no entitlement to any part of the building insurance — only a contents policy protects your possessions.

Key Distinction: Side-by-Side Comparison

The table below summarises the key differences between body corporate insurance and contents insurance for unit title properties in New Zealand.

Body Corporate Insurance Contents Insurance
Who arranges it Body corporate committee Individual unit owner
Who pays All unit owners via levies Individual unit owner
Legal requirement Yes — Unit Titles Act 2010, s.135 Not legally required, but strongly recommended
What's covered Building structure + common areas Personal belongings + owner-installed fixtures
Typical cost $800–$4,000+ per unit/year (via levies) $300–$800 per year

Note: Cost figures are indicative only and vary by property type, location, and level of cover. Speak with your adviser for an accurate assessment.

Common Misconceptions

These misunderstandings regularly leave unit owners exposed to uninsured losses.

1. "Body corporate insurance covers my belongings"

This is the most common misconception. The body corporate policy insures the building — not what is inside individual units. Personal items such as furniture, appliances, clothing, and electronics require a separate contents policy.

2. "I don't need contents insurance if the body corporate has insurance"

This is incorrect. The body corporate policy will not cover your furniture, appliances, or personal improvements regardless of what caused the damage. Your adviser can help you identify the right level of contents cover for your circumstances.

3. "The body corporate should cover my kitchen renovation"

Only if the kitchen was part of the original build specification. Improvements and upgrades made by unit owners after the building was constructed are generally the owner's responsibility. If you have renovated your kitchen or bathroom, speak with your adviser about whether those improvements are adequately covered under your contents policy.

When in Doubt, Ask

If you are unsure whether a specific item is covered by the body corporate policy or requires separate contents cover, your adviser can review the body corporate insurance certificate and give you clear guidance. It is better to clarify before a claim than after one.

2022 Amendment Act Disclosure Requirements

The Unit Titles (Strengthening Body Corporate Governance) Amendment Act 2022, which came into force on 9 May 2023, introduced new disclosure obligations relevant to insurance.

Before a unit title property sale is completed, the vendor (or body corporate) must now disclose insurance details including:

  • The name of the insurer
  • The type and amount of cover in place
  • The annual premium
  • The excess applicable to claims
  • Any specific exclusions that apply to the policy

This means prospective purchasers of unit title properties now have a legal right to review insurance details before committing to a purchase. If the body corporate is underinsured, carries a high excess, or has significant exclusions, this must be disclosed.

Practical Implication for Buyers

When purchasing a unit title property, review the disclosed insurance details carefully. Check whether the sum insured appears adequate for full reinstatement, what the excess is, and whether there are exclusions that affect your unit. This is also the right time to arrange your own contents insurance before settlement.

For full details, see the Unit Titles (Strengthening Body Corporate Governance) Amendment Act 2022 on the New Zealand Legislation website.

Frequently Asked Questions

What's the difference between body corporate insurance and contents insurance?

Body corporate insurance covers the building structure, common areas, and shared facilities of a unit title development. Contents insurance covers the personal belongings and owner-installed fixtures inside individual units. Under the Unit Titles Act 2010 (Section 135), the body corporate must arrange building insurance; unit owners must separately arrange their own contents insurance.

Does body corporate insurance cover my furniture and appliances?

No. Body corporate insurance covers the building structure and common areas only. Your furniture, appliances, clothing, electronics, and personal possessions are not covered by the body corporate policy. You need a separate contents insurance policy for these items.

Is contents insurance mandatory for unit owners in New Zealand?

Contents insurance is not legally required for unit owners under the Unit Titles Act 2010. However, it is strongly recommended. Without it, you have no cover for personal belongings, owner-installed fixtures, or temporary accommodation if your unit becomes uninhabitable.

Who pays for body corporate insurance?

The cost of body corporate insurance is shared among all unit owners and collected through body corporate levies. The body corporate committee arranges the policy and the premium is apportioned among owners, typically based on ownership interest percentages set out in the unit plan.

What happens if I don't have contents insurance?

If you do not have contents insurance and your belongings are damaged or stolen, you will have no insurance cover for those losses. The body corporate policy will not reimburse you for personal items. You would also be responsible for any temporary accommodation costs if your unit becomes uninhabitable and you have no contents policy providing that benefit.

Speak with an Adviser About Your Cover

Your adviser can review both your body corporate insurance and help identify whether a contents policy is appropriate for your circumstances.

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All advice provided through Evolve Group Limited (FSP711891)