The best way to think about landlord insurance is that it provides cover for a much wider range of things than regular house insurance and is specifically designed to protect Aotearoa’s hundreds of thousands of Kiwi landlords from loss from foreseeable tenant-related circumstances.

While house insurance protects your home and some personal belongings, landlord insurance covers costs from risks like tenant caused damage and lost rental income because a tenant has ‘done a runner’ or suddenly can’t pay due to financial hardship.

Landlord insurance is not legally required, but many landlords will tell you it is worth the peace of mind and can save you stress and expense given New Zealand’s traditional natural disaster risks, like earthquakes and floods and more recent history of violent cyclones and bush fires.

A simple test for whether it is worth it to actively weigh-up the benefit of landlord insurance against the cost is to consider if you could manage the hit to your finances if your rental property was suddenly left empty and had to be repaired before it could generate rental returns again. 

Landlords should be aware that rental insurance policies vary and that it is important to read the fine print to check what you will and won’t covered for.  Your Raine & Horne property manager is very experienced in this area and can give you valuable advice on how to proceed if you are considering landlord insurance.

Here are the key areas most landlord insurance policies cover:

• Rebuilding and repair costs: Policies can cover repairs after natural disasters, accidental damage or fires.
• Loss of rental income: Landlord insurance often covers lost rent if damage from events like fire or flooding makes your property uninhabitable, as well as in other circumstances’ depending on the policy.
• Landlord contents: Policies will generally cover items you own in the property, like appliances and fixtures. They won’t cover tenants’ belongings, so tenants should be encouraged to get their own insurance.
• Intentional damage: If a tenant causes intentional damage, landlord insurance can often cover repairs but check the fine print for definitions.
• Legal liability: Landlord insurance can protect you if someone is injured on your property due to an issue you’re responsible for.
• Methamphetamine contamination: Property contamination from ‘meth’ is a real risk for Kiwi landlords. Many policies now cover clean-up costs if this happens.

What are the exclusions?

• Although some policies provide coverage for unpaid rent, there are others that do not, stating that it is a risk best managed by the property owner.
• Things that build up over time causing major damage to the property, such as leaking pipes or mould, are also not covered, even though these are more likely to happen as tenants are less likely to report small leaks or the first signs of damage.
• The mess that renters can leave when they move out are also not considered damage, so landlords will not be able to claim the cost of cleaning it up. Be aware!

Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.