There are potential insurance risks for properties that have shared areas, for example multi-storey town houses, semi-detached homes which share a party wall, and cross lease properties which have carports, the Insurance Council of New Zealand has warned.

If your property does not have a body corporate that manages insurance cover for the whole property, and if you and your neighbours have different insurance providers, you may find that any shared property such as carports, party walls and roofs will not be covered by your insurance.

When you obtain finance through a bank or other lender, generally you agree that you will maintain adequate insurance to cover the replacement of your property if it is damaged or destroyed. If your insurance cover is insufficient, or if there are gaps in your cover, this can result in you breaching the conditions of your home loan.

If you are buying a property, it is wise to check that suitable insurance cover is available before you go unconditional on your purchase. If you would like to make your purchase agreement conditional on finding suitable insurance cover before going unconditional – we can guide you on this.