Across New Zealand, more developers are introducing resident society insurance — and for good reason. With the rising cost and complexity of individual property insurance, collective policies are making a comeback, helping protect both owners and the long-term value of communities.
What is Resident Society Insurance?
Resident society insurance is a collective policy arranged by the society that covers all homes or units within a development. It functions much like a Body Corporate policy but applies to fee simple or freehold properties that share common infrastructure, such as driveways, landscaping, or shared utilities.
Instead of each homeowner arranging their own cover, the society purchases a single policy that applies across all lots. Each owner then contributes their share of the premium, often as part of the annual levy.
To find out What is a Residents Society?
Why Developers are Bringing Back Collective Insurance
Crockers has noticed a growing trend among developers: new residents’ societies are once again being established with shared insurance in place.
Previously, many societies left insurance to individual owners. However, the rising difficulty of obtaining standalone insurance — particularly in multi-unit or high-density developments — is driving developers to include collective cover from the outset.
There’s also a financial logic. Bulk insurance can be more cost-effective, with the society able to negotiate better premiums and broader coverage compared to what each owner could obtain individually.
Risks When Individual Owners Go Without Insurance
While a shared insurance arrangement offers security, some existing societies still rely on owners to arrange their own cover. This creates a potential risk — not just for those uninsured, but for everyone else in the development.
For example, if a fire occurs in one property, your own insurance may repair your unit, but if your neighbour’s property is uninsured, there’s no policy to fund repairs to theirs. The resulting damage and neglect can impact the appearance and overall value of the community, including your home.
A recent survey reported that around 17% of New Zealand homeowners do not have house insurance. If that figure were applied to residents’ societies nationwide, nearly one in five homes could be uninsured — a concerning prospect in developments where properties are closely connected.
Growing Urgency for Collective Cover
The message from researchers and regulators is becoming clear — collective resilience is now a necessity. The Consumer NZ report Will you be able to get home insurance by 2035? warns that without stronger climate adaptation and market reform, some New Zealanders may not be able to access insurance at all within the next decade.
House insurance prices have already risen about 916% since 2000, making it the single largest cost increase in the Consumers Price Index over the past 25 years. As affordability erodes, the risk of uninsured homes grows — which is why residents’ societies that implement collective cover are better positioned to safeguard all owners.
In many ways, shared insurance isn’t just about cost efficiency — it’s about ensuring the development remains fully protected and financially viable in the long term.
What Lenders and Valuers are Watching
Lenders and valuers are also becoming more alert to the insurance risks associated with multi-unit and residents’ society developments. If even a few dwellings within a community are uninsured, banks may view that as a threat to the security of their lending. Likewise, valuers may note potential impacts on marketability, which can influence sale prices.
A well-managed society with transparent, collective insurance demonstrates good governance, reduces uncertainty for buyers, and maintains confidence in the value of the homes.
At a Glance, Individual vs Society-Wide Insurance
| Aspect | Individual owner policies | Society-wide policy |
| Consistency of cover | Variable by owner | Standard across all lots |
| Risk of uninsured neighbours | Higher | Lower |
| Buying power | Fragmented | Bulk negotiated |
| Administration | Many renewals, hard to verify | One renewal, clear oversight |
| Impact on saleability | Depends on neighbours’ choices | Stronger buyer confidence |
Conclusion
Resident society insurance isn’t just a formality — it’s a safeguard for everyone involved. Whether you’re buying into a development or already part of one, take time to understand how your society manages insurance and whether improvements could reduce risk for all.
For more information on What’s Covered by Body Corporate Insurance?
