The requirement for 3 monthly property inspections forms part of most landlord insurance policies.
A rental property that is inspected regularly is less likely to be ill treated by its tenants, and if the property does suffer some damage it is easier to establish what and when it happened.
There is widespread debate among landlords, tenants, property managers and insurers as to whether 3 monthly inspections are too frequent and disruptive to tenants.
What is not well understood by landlords is that superior landlord insurance policies (like initio) provide insurance irrespective of whether property inspections are being completed or not.
So, here’s three things you need to know:
1. You are still insured if you don’t do property inspections
From an insurer’s perspective the landlord obligations are NOT a requirement to make ANY claim acceptable. At claim time, property inspection information will only requested when the claim is for a tenant related loss such as meth or malicious damage.
So if you are making a claim for intentional damage caused by the tenant or meth contamination – your insurer may ask to see copies of your property inspections. However, if your claim is for damage not related to the tenancy such as a burst water pipe, a storm blowing the roof off, an earthquake, or total loss house fire (to name just a few) the insurer will not be interested in your property inspections as they are not relevant.
2. 6 monthly inspections used to be the norm, until …. Meth.
It is only recently that insurers have moved to 3 monthly inspections. This is a direct consequence of the rising cost of methamphetamine contamination claims.
To put this in perspective, at its height Initio was receiving a new meth claim per day, and that cost a lot of money. We noticed that a large number of meth claims could have been avoided or at least mitigated by better risk management, namely more regular property inspections. So instead of pushing prices up further to offset this risk (or excluding meth cover all together) we decided that if landlords wanted ongoing meth cover they would need to take an active role in managing the risk through, among other things, property inspections.
Good insurers (like initio) will not use the landlord obligations as a way to avoid claims, but as a way to fast track claims for landlords with good risk management.
3. New Zealand Property Investors Federation members – 4 monthly inspections periods.
We are proud to be the insurance partner to the New Zealand Property Investors Federation (NZPIF). The NZPIF take an active role in professionalising property investing in New Zealand with knowledge, leadership and resources for members.
Our data shows that property investor members have approximately 50% lower incidence of meth and malicious damage claims, compared to non members.
Members of the NZPIF who insure with Initio receive the benefit of 4 monthly inspection periods. Visit NZPIF to find out more about organisation, including how to become a member of a local property investors association. Associate membership starts from just $25 per year.
Established in 2010, Initio is a digital insurance provider specialising in property insurance, including rental property insurance, landlord insurance, holiday homes, and home and contents. Customers can quote, start cover, modify cover and make claims – all online. Initio is underwritten by NZI (IAG New Zealand Ltd)