Landlord Insurance – We have comprehensive cover for landlords including:
Gradual Damage – up to $5,000; some insurers don’t provide cover; others limit cover to $1,000-$1,500
Malicious Damage – up to $30,000 with an excess from $500; some insurers don’t provide this cover; others limit cover to $1,500 or have large excesses.
P Damage – up to $30,000 with an excess from $500; some insurers don’t provide this cover; others limit cover to $1,500 or have a $2,500 excess.
Loss of rents – some insures only cover loss of rents as a result of a fire; we cover loss of rents due to malicious damage, P-damage, tenant abandonment as well as fire and other property damage.
In the NZ market there are 3 basic types of cover
Restricted Full Cover – This covers the dwelling and notes that the home is used as a rental, but removes much of the standard cover, such as accidental damage, gradual damage and does not include cover for malicious damage, P and other landlord risks.
Full Cover – This covers the dwelling and includes cover for landlord risks such as malicious damage. There is a big range in the breadth and amount of cover provided by different insurers. For example: do they provide gradual damage cover, what do they define as gradual damage (some only include damage caused by hidden leaking waste water pipes, while better policies include damage caused by leaking hidden water supply pipes as well) and what is the maximum amount they will pay out; for some it is only $1,000.
Top-up Cover – where you have 2 insurance policies (quite often with different insurers), it consists of a base policy to cover the dwelling for non-landlord risks like fire & storm damage, and a Top-up policy which covers the landlord risks like malicious damage. This can cause problems at claim time where there is a gap or conflict between the 2 policies.
Top-up Cover is the only option for a property which is part of a body corporate, where the body corporate insures the building and the Top-up Policy provides the Landlord Cover.
We prefer to provide Full cover policies for homes and Top-up policies for body corporates only.
Case study 1
John had a rental property with another provider. He had a base policy, which covered the standard house risks. He also had a landlord top-up policy to cover the landlord risks.The property suffered malicious damage to the kitchen sink cupboards. John lodged a claim under the top-up policy, which covered malicious damage. The claim was accepted. An assessor was sent out, who got a number of quotes; the new units arrived a few weeks later. When the repairer removed the old units, he discovered that there had also been gradual damage from a leaking pipe to the floor under the kitchen units. The floor had to be repaired before the new kitchen units could be installed.
John was lucky. His base policy covered gradual damage (many policies do not for rental homes). This meant that a new claim had to be submitted to the base insurer.After a week, the claim was accepted and an assessor sent out, the assessor got several repair quotes. After a couple of weeks delay, the floor was repaired.The original kitchen unit installer was contacted to install the units. Due to the installer having other jobs scheduled, the installation took another 10 days.The top-up insurer covered the loss of rents for the original job, but not for the additional 4 weeks. That was due to the gradual damage. The base policy did not cover loss of rents from gradual damage, John was left out of pocket for 4 weeks’ worth of rent.
If John had had our “all in one” policy, the repair time would have been reduced and the loss of rents would have been covered for the whole duration.
Case study 2
The following is based on a situation as described by a landlord.
Tim had insured his rental house via his property manager, he had a base policy to cover the house for the normal things and a top-up policy to cover the landlord risks.The tenant was given an eviction notice for non-payment of rent; in a fit of rage he attempted to set fire to the house, the fire did not take, but still did an estimated $20,000 damage.
Tim lodged a claim with the top-up insurer, after all it was malicious damage, and was shocked to be told that although the policy covered malicious damage, it excluded fire as a cause.
No problem thought Tim, I will claim it under my base policy as that covers fire, but was told, while the policy covers fire it excludes malicious acts by the tenant.The result is that Tim has a mortgage to pay, a house that can’t be rented out, about $20,000 in repairs to fund, a tenant who has disappeared (& does not have any money) and two insurers saying that their policy cannot help.
Tim’s question is how could neither policy cover him?
This is the reason we recommend an all in one landlord policy, If Tim had had our policy, not only would the repair costs have been covered, he would also have been covered for the loss of rents during the repairs.
Short term rentals
Many Insurer will not cover short term rentals like Air BnB and Book a Batch or impose high premiums and Excesses. Most property owners do not know that using a property (or part of it) for short term rental is a material fact and an insurer could decline a claim if they are not aware of the rental activity.
We can provide comprehensive cover for your short-term rental including:
- Building cover
- Malicious damage
- P damage – This is a growing problem for owners of short term rentals
- Loss of rents