Insuring your home with an attached flat
Navigating the intricacies of insuring a home with an attached flat in New Zealand, especially one that is rented out part-time, can be overwhelming for landlords and property investors.
Key takeaways
- If you live in your home and occasionally rent out an attached self-contained flat, you’ll generally need two separate insurance policies.
- An Own Home policy covers the part of the property you live in.
- A Landlord policy covers the attached flat while it’s rented to tenants.
- Each policy is designed for a different type of occupancy and the risks that come with it.
- If you need to make a major claim, both policies may respond, with the combined sum insured applying to the whole property.
- If both units are long-term rentals owned by the same person, a Multi-Unit policy may be a better option.
At Initio, we are dedicated to helping you make sense of these complexities, equipping you with the tools needed to make the right insurance choices for your unique situation. This article is specifically designed to assist you in understanding the process for homes with attached flats rented out occasionally.
Guidelines on insuring your home and attached flat in NZ
If you happen to own a home with an attached flat rented out occasionally, you may find yourself unsure about how to secure the right insurance coverage. This situation differs from one where both units are exclusively used as long-term rentals (which are catered for by our multi-unit policy). Insuring a property where you live and have an attached flat rented out part-time necessitates a more nuanced approach.
Here’s what you need to know:
- Own Home policy: This policy has been crafted to cover the portion of the property that you inhabit.
- Landlord/Rental policy: This policy needs to be put in place to provide coverage for the attached flat when it’s rented out. Even if the rental isn’t full-time, coverage for the times when the flat is tenanted is ensured by the landlord/rental policy.
Should a significant claim arise, both policies would be engaged, with the combined sum insured being applicable to the whole property.
Why do I need two policies?
Each policy is designed specifically to cover one self-contained home/unit only and for the risks associated with the type of occupancy. The Own Home policy provides coverage for the main house/unit where you live, while the Landlord/Rental policy covers your rental home/unit including the legal liabilities and other specific risks associated with renting.
Which policy do I need?
| If your situation is.. | You’ll usually need… |
|---|---|
| You live in your home | Own Home insurance |
| You rent out a separate property | Landlord insurance |
| You live in your home and rent out an attached self-contained flat | Both an Own Home policy and a Landlord policy |
Conclusion
The process of insuring a home with an attached flat, rented out on occasion, needn’t be a difficult one. With an understanding of how Initio’s insurance products can be strategically combined, comprehensive protection of your property is ensured. Additional information on this topic, as well as other insurance solutions offered by Initio, can be found here.
Frequently asked questions
Can I insure my home and attached flat under one policy?
Not if you live in one unit and rent out the other. In this situation, you’ll generally need an Own Home policy for your home and a Landlord policy for the attached flat.
Why do I need two insurance policies?
Because each self-contained unit has a different use. Your home is owner-occupied, while the attached flat is rented out. Each requires a policy that’s designed for those specific risks.
What counts as a self-contained flat?
A self-contained flat is a unit with its own facilities for living independently, such as a kitchen, bathroom and sleeping area. See our what counts as a self-contained unit guide for more information.
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