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Hosting short-term guests introduces unique risks. Most insurance companies are cautious about rented holiday homes so before letting out your home or listing your property on platforms like Airbnb or Bachcare, it’s important that you confirm your policy covers holiday bookings.

Effects on insurance costs

If you host paying guests, and you tell your insurer, they will likely adjust your coverage. Be sure to inform your insurer about your hosting activities and understand the implications for your policy. Many insurers, including initio, may increase premiums or excesses due to the additional guest-related risk. Some insurers may exclude coverage for guests entirely, leaving you at risk of being uninsured. It’s best to review your policy or contact your insurer if you’re unsure.  Make sure your insurer is aware that you rent out your holiday home.

What qualifies as a holiday home, for insurance purposes?

To qualify as a holiday home, the owner must;

• Use the property themselves as a holiday home, and;
• Have the right to occupy the property at will, and;
• Store personal belongings at the home.   

A holiday home can be used by:

• The owner, at any time.
• Friends and family.
• Tenants on a periodic basis, including short-term paying guests (stays with durations of less than 90 days).  

These criteria ensure the property remains under your control and qualifies as a holiday home with your insurance provider and meets the requirements for cover provided by the Natural Hazards Commission (NHC, previously EQC).  

How property management can affect your insurance

Using a property management company under a full management contract can impact your insurance. If the property manager has full control, you may lose the right to occupy the property, which can disqualify it from being considered a holiday home, and makes it ineligible for Natural Hazards Commission (NHC) coverage.  You must check your agreement with your property management provider as it may mean that you have assigned control cover to the manager and you no longer have the ability to occupy it when you wish.  

An insurer cannot provide domestic house insurance cover for a holiday home that does not meet the conditions of cover for the NHC. 

Understanding NHC cover: The Natural Hazards Commission (NHC) provides special insurance protection for the home against natural disasters like earthquakes and floods, and unlike your house insurance policy, it also extends to cover land damage.  To qualify, your property must meet specific criteria, including being under your control as a holiday home. For detailed information, refer to the NHC guidelines.

What if your property does not qualify as a holiday home under the NHC legislation?

If your home does not meet the NHC definition of a holiday home, to obtain cover you will likely need a commercial property insurance provider to structure insurance that covers the building, loss of income and liability risk.  

Does landlord insurance cover short-term rentals like Airbnb?

No, our landlord insurance is designed for standard long-term residential tenancies only. It doesn’t cover properties used for short-term rental activity such as Airbnb or Bookabach.

If you rent out your own home (where you live) occasionally on Airbnb, you may be eligible for cover under our Own Home, Sometimes Rented policy. Similarly, if you have a family bach or holiday home that you occasionally let to paying guests, it may be suitable for our Holiday Home insurance – sometimes rented – just make sure to select the option for short-stay rentals when quoting.

Short-term rental properties that operate like a business typically require commercial insurance, which isn’t available through initio. Learn more about the things we don’t cover at initio.

Doesn’t Airbnb’s ‘Host Guarantee’ cover me?

If you manage your property using Airbnb, you’re likely familiar with their Host Guarantee.

It’s important to understand that this guarantee isn’t a substitute for proper insurance. The Host Guarantee comes with limitations and might not cover everything you anticipate. It’s not equivalent to regular insurance and some hosts have discovered it doesn’t provide comparable protection. To ensure your property is fully covered against any damages or issues, having your own insurance policy is essential.

Airbnb’s Host Guarantee is not a traditional insurance policy but a conditional promise. It’s not regulated like insurance. Key requirements include:

• Report damage and file a claim within 14 days.
• Provide proof of ownership and, in some cases, a certified police report.

House Guarantee conditions can include:

• Only covers damage during the booking period.
• Coverage is limited to listed areas in your profile.
• Exclusions include damage from excessive utility use, animals, or pets.
• Rent loss cover only applies to confirmed bookings cancelled due to damage.

Given these limitations, Airbnb themselves recommends having a specialist insurance policy in addition to the Host Guarantee.

Everything’s in order, how do I get the right cover?

If you manage your holiday home yourself and meet the necessary NHC criteria, initio offers specialised cover for your holiday home  that is also used for short-term rentals. As the first in New Zealand to provide a house insurance policy specifically designed for holiday homes, Initio offers a hybrid house, contents, and guest insurance policy tailored for short-term rentals, without the strict conditions of a Host Guarantee.

Initio’s holiday home (with the additional short stay option) policy covers:

• The home itself for damage from things like flood, fire and storm (whether rented or not) 
• Accidental damage to the home by guests.
• Intentional damage by guests, up to $25,000 (e.g., if guests decide to damage walls deliberately) .
• Loss of rent for confirmed bookings cancelled due to the home becoming uninhabitable following insured damage, and also for loss of rent from unconfirmed bookings based on seasonal, area or your previous year’s use data) 
• Meth contamination from manufacturing, ie. contamination damage caused by an accidental incident in connection with the manufacture, distribution or storage (but only where the storage is in connection with supply or distribution) of methamphetamine at the home.
• Your legal liability to your guests for accidental damage and bodily injury.

These are the sort of protections you need when renting your home out to short-term guests.

Key takeaways

• Check your insurance: Ensure your policy covers holiday rentals before using platforms like Airbnb.
• Higher costs: Be prepared for higher premiums or excesses if your insurance covers guests.
• Host guarantee limits: Airbnb’s Host Guarantee has strict rules and limited coverage.
• Property Management impact: A property manager’s control might disqualify your home from holiday home insurance, check your agreement with the property manager and that you still comply with the NHC definition of a holiday home.
• Holiday Home rules: You must retain occupancy rights and keep belongings there to maintain holiday home status.
• Get the right insurance: Choose insurance designed for short-term rentals for better protection.
• Comprehensive coverage: Seek policies that cover guest damage, lost rent, meth contamination, and liability.

By managing your property with these factors in mind, you can better protect your holiday home and maintain your insurance coverage.

Holiday Home Insurance
Holiday Home vs Own Home

Related articles

• How to claim for intentional vandalism by tenants
• Should I get a property manager?
• Second dwelling on your property that you rent out?
• Help when your quote isn’t ‘straightforward’
• Should you rely on the Airbnb host guarantee?

Landlord insurance is a tailored policy for a property used as a rental.  It is different to normal house insurance.  Landlord insurance covers both the rental (your house itself) and the additional risk added by having a tenant in the property.

All homeowners are exposed to common risks such as fire damage, flood, and earthquake, but as a landlord you face an additional occupancy risk due to a tenant living in the property.  Unlike family, tenants are not generally known to you.  

How is landlord insurance different from house insurance?

In short, landlord insurance is the same as insurance for your own home, but for two big differences:

• Disclosure – use of the property: 
  Landlord insurance specifically accounts for the fact that your family does not live in the property.  This is very important.  If your rental property burns down and your insurer is not aware that it is a tenanted property the insurer could be entitled to deny your claim. 
• Additional landlord risks:
  Unlike your own home insurance, most landlord insurance includes coverage to specifically address the additional landlord risks:  

What are my additional risks as a landlord?

Accidental damage by tenants

This is where your tenant un-intentionally causes damage to the property.  For example:  they spill a glass of red wine on the carpet.  In this situation you need a landlord insurance policy in order to have a successful claim.   It is unlikely that you can recover the cost of your insurance excess from the tenant.  

Deliberate damage by tenants

Deliberate damage, also known as malicious or intention damage is usually the case when, as a landlord, you discover holes in walls and damage that is unlikely to have been the result of an accident.  Cover for this is provided by a landlord insurance policy, usually up to a limit of around $25,000.  The cover protects you from the cost of a tenant deciding to make a mess of your property.  

Loss of rents following damage

If your rental property suffers a loss that deems the house uninhabitable then you face having an un-tenanted property while the repairs are completed and the property is occupied again.   This will mean a loss of rental income.  Landlord insurance provides cover for this loss of income up to a selected value (eg $40,000) for a payout period of usually 12 months.   For major losses the cover will stop as soon as the loss of rent amount is used or the payment period ends, whichever comes sooner.  

Loss of rents resulting from eviction or abandonment

This is where your tenant is evicted from the property (by decision of the Tenancy Tribunal) or your tenant leaves without giving notice.  In both situations it means that you will be out of pocket due to loss of rental income.  Some landlord insurance policies will reimburse you for this loss of income but only up to 6 or 8 weeks, following the formal eviction or discovery of the abandonment.  

Landlord contents damage or theft

Even an unfurnished rental property had landlord contents.  The oven and curtains are contents, not house.  The tenant risk means that you could suffer a loss to these items, and this risk increases when you partially or fully furnish a property.  A landlord insurance policy protects by providing cover, usually up to a standard limit of $20,000.   Some landlord insurers provide an option to purchase more contents cover for an additional cost, which is important for furnished properties.  

Landlord liability

As a landlord you accepting money (rent) for providing a house (accomodation).  This makes means that you are in the business and with this comes additional regulatory obligations that, if breached, can cost you.  Tenants can also have a go at you if they suffer a loss because of something you did (or didn’t do).  The best example here is if a landlord did not change the locks after a previous tenant abandoned it and the new tenant was robbed (with no sign of forced entry).   Some landlord insurance policies include cover for landlord liability, meaning that if you are pursued by a tenant or a regulatory authority the insurer use their lawyers to defend you, and if you are held liable pay certain awards against you.  

Meth contamination

Meth and other illegal substances can cause significant damage to a property, especially when the substance is being manufactured.   Meth clean-up costs can easily exceed $10,000.  Reducing the risk of contamination occurring is best managed through good tenant vetting procedures and meth testing in between tenancies.  If you do suffer a contamination loss and have a robust landlord insurance policy you will have cover for up to $30,000, plus the loss of rental income incurred.  

Can I hold the tenant responsible for damage?

Yes and no.  It really depends whether the damage was accidental, intentional, or just careless.  Having a good landlord insurance policy would mean you are covered for all the causes of damage by the tenant – and then your insurers will decide whether to go after the tenant for the repair costs.  

The good news is that the Residential Tenancies Act now provides scope for landlords (and their insurers) to recover the cost of repairs or their insurance excess from the tenant.   Learn more holding tenants responsible.  It is important to note that, more often than not, tenant damage claims result in the landlord’s insurer applying more than one excess.  This is because insurance works on incidents, and each incident is a separate claim that attracts its own excess.  Learn more about how insurers look at events

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Want more information?

Explore these additional articles that may interest you:

• Five fundamentals of landlord insurance
• Guide to landlord insurance
• Are you thinking of renting our your home and becoming a landlord?

Landlord Insurance is different to standard house insurance. It covers the house itself, and the extra risks you face being a landlord for standard long term residential rentals.

Homeowners are exposed to standard risks such as fire, floods, and earthquakes. Landlords are exposed to these standard homeowner risks, as well as the risks associated with renting to tenants.

What extra cover does Landlord Insurance provide?

Damage by Tenants Loss of Rents Meth Contamination Landlord Contents

Damage by Tenants

A standard house insurance policy might have cover for accidental damage caused by tenants, but will not cover intentional damage by tenants.

Intentional damage can come from your tenant punching walls, vandalising the property or throwing a raucous party. This is a common insurance claim for landlord’s, and can often prove costly.

Initio Tenant Damage Protection

Our landlord insurance policy provides full cover up to your sum insured for accidental tenant damage. You are also covered for intentional damage, vandalism or theft.

Damage caused by your tenant, paying guests, or any person who occupies the home (and any guest associated with these people) is covered.

Our policy covers up to $25,000 per event for intentional damage. Serious fire or explosion damage is covered over the $25,000 limit and up to your property’s full sum insured.

Loss of Rents

Rental income is essential to landlords.

If your rental is damaged and it can no longer be rented, you face both the costs to repair and the lost rental income you would have otherwise received. Standard house insurance will not cover loss of rents.

A landlord insurance policy will provide cover to rebuild your property, while also paying you lost rents if the home is unliveable while being repaired.

Tenant vacating without required notice or Eviction

Loss of rent can arise from scenarios beyond property damage.

It’s not uncommon for tenants to unexpectedly vacate their property or to be evicted due to non-payment if they fall 21 days behind. Additionally, there might be instances where tenants can legally cease rent payments under their tenancy agreement, such as when access to the property is prevented or essential utilities fail.

Should these issues arise, a comprehensive landlord insurance policy from initio protects against these losses. We cover rents for up to six weeks if your tenant leaves without the required notice or is evicted for non-payment. This coverage also extends to situations preventing access to the home or significant utility failures, ensuring a gap in rent doesn’t harm your financial security.

Property Damage

We cover up to 52 weeks of rents, or the loss of rent sum insured you select.

Insurance is triggered when there is physical damage to your rental that means it can no longer be lived in. A flood damaged house can take months or even a year to repair, so is essential for any landlord especially those with mortgage payments.

We include $20,000 loss of rent for free in all our policies. That’s $384 in weekly rent for a year, with options to increase this to $40,000 or $80,000.

Meth Contamination

Meth is rampant in New Zealand and landlords are particularly at risk. A badly contaminated house can cost tens of thousands of dollars to clean so that it can legally be rented again.

Specialist landlord cover is vital, as a standard house insurance policy will not cover meth.

This can come from consumption (smoking), or manufacturing. A meth infected house can be considered unsafe to live in and will be required to be de-contaminated to an appropriate level.

Landlord insurance will cover the costs of laboratory testing, and cleaning where there is a positive reading. The cleaning process can take months, so a landlord policy with loss of rent cover on top of cleaning cover is essential for managing your risk as a landlord.

Initio Meth Cover

We provide up to $30,000 of protection for meth testing and cleaning costs where a positive meth test has been found.

Loss of rent cover applies over and above the $30,000 of cover. We will pay out your weekly rents while your property is cleaned, for up to a full 52 weeks, or up to your loss of rent sum insured.

Landlord Contents

These days it’s common for landlord’s to rent their properties pre-furnished. This can include valuable belongings such as appliances, fittings and furniture.

Landlord insurance policies now provide bolt on cover or extensions to cover small amounts of landlord contents. This can either be included as standard or you can pay extra to include it.

Contents can be covered for their depreciated present value. A good landlord insurance policy will pay for new replacement items.

Initio Landlord Contents Cover

Our policy automatically includes $20,000 of landlord contents as standard.  This is a minimum amount covered by our policy for our landlord policy, for more kitted out properties there are options to increase this to $40,000 or $60,000.

This covers damage to your fittings in your rental, and can also cover theft of contents you include in the tenancy. Please note this applies to fixtures and fittings, but not your personal items.

We pay for a brand new replacement when the damaged item is no older than five years old. If the item is over five years old, we payout a present value replacement amount.

I have less than $20,000 worth of contents, can I reduce the amount?  No, the limit of $20,000 is standard to the policy, you will be covered for any chattels up to that figure automatically.

Does initio landlord insurance cover my rental property if it’s furnished or unfurnished?

Yes. Whether your rental is furnished or unfurnished, you’re covered.

Initio’s landlord insurance automatically includes cover for landlord contents – things like non-fixed appliances, curtains, rugs and heaters. If you fully furnish the property, you can opt to add extra contents cover for those items too.

Want more information?

Explore these additional articles that may interest you:

• Five fundamentals of landlord insurance
• What is landlord insurance?
• Are you thinking of renting our your home and becoming a landlord?
• What does landlord insurance cover?

As a homeowner in New Zealand, you may have noticed fluctuations in your house insurance premiums over the years. While factors such as the rebuild cost of your home and the frequency of local weather events play significant roles, there’s another crucial element influencing your home insurance pricing: the global pool of insurance funds.

To put this into context, consider your personal insurance excess, which might be $650 for your house. In comparison, IAG has a $500 million excess for covering multiple homes in New Zealand in the event of a disaster. Similarly, while your house might be insured up to $1 million, IAG’s reinsurance limit is $10 billion. Although this is a simplification, it helps explain how reinsurance works.

The key takeaway here is that initio and IAG ensure you are well-covered. For more details, you can read the official article from IAG here.

New Zealand: A high-risk country with a small pool

New Zealand is one of the highest earthquake-risk countries in the world, situated within the volatile “Ring of Fire.” This inherent risk, combined with our relatively small population, means we draw from a comparatively smaller pool of insurance funds than larger nations. Consequently, our home insurance market heavily relies on global reinsurance companies to provide additional coverage and spread the risk.

New Zealand’s high exposure to natural disasters like earthquakes, floods, and cyclones makes it one of the riskiest countries for insurers. This, coupled with our small population and insurance market, underscores the importance of attracting global reinsurers to provide essential coverage.

For reinsurers to support the New Zealand market, it must be a worthwhile proposition. They carefully assess the risk-reward balance, considering factors such as the frequency and severity of past events, the potential for future catastrophes, and the insurance penetration rates in the country. If the risks outweigh the potential returns, reinsurers may limit their exposure or demand higher premiums, ultimately impacting the cost of home and contents insurance for New Zealanders.

What is a reinsurer?

A reinsurer is essentially an insurance company for insurance providers. When an insurance provider issues policies to customers, it takes on the financial risk associated with potential claims. To manage and mitigate this risk, the insurance provider may seek additional coverage from a reinsurer.

Here’s how it works:

1. Risk transfer: The insurance provider transfers part of its risk to the reinsurer. This process is known as “reinsurance.” By doing this, the insurer reduces its exposure to large or unexpected claims.
2. Premium payment: In exchange for taking on this risk, the reinsurer charges the insurance provider a premium. This premium is typically lower than the total premiums collected from policyholders, allowing the insurer to maintain profitability while securing additional risk protection.
3. Financial stability: Reinsurers help insurance providers maintain financial stability, especially in the face of large-scale disasters. For example, if a major earthquake occurs, the financial burden of the claims is shared between the insurer and the reinsurer, ensuring that the insurer can meet its obligations to policyholders.
4. Global risk distribution: Reinsurers operate globally, spreading risk across different regions and types of insurance. This global reach allows them to balance their portfolios and better manage the financial impact of claims from catastrophic events.

The importance of reinsurers

Reinsurers play a crucial role in the insurance industry by providing a safety net for insurance providers. This enables insurers to offer coverage to high-risk areas, such as New Zealand, which is prone to natural disasters like earthquakes, floods, and cyclones. Without reinsurance, insurers might be unable to cover such risks or would need to charge prohibitively high premiums.

Reinsurers enhance the capacity and resilience of the insurance market, ensuring that policyholders receive the protection they need, even in the event of significant and unexpected claims.

Global events and local insurance impacts

While major weather events or natural disasters overseas may not directly impact New Zealand, they can still influence home and contents insurance pricing locally. For example, when hurricanes, earthquakes, or wildfires strike other regions, reinsurers must divert funds to cover those losses. This depletion of the global insurance pool can lead to higher reinsurance rates, which local insurers must then pass on to their customers through increased home insurance premiums.

During hurricane seasons in the United States, insurance companies often raise their premiums due to the increased risk. This increase is subsequently passed on to reinsurers, making the US market more attractive to them compared to New Zealand. Reinsurers get a better return on their investment in the US market due to higher premiums and a larger risk pool. It’s also important to note that the IAG program covers both Australia and New Zealand, which makes it relatively smaller compared to the US market.

It’s not just the overseas events that can impact your house insurance pricing. Local factors can also have significant consequences. The devastating floods and cyclones of 2023 led to substantial claims and higher reinsurance costs for local home insurance providers.

The impact of regulation on pricing

New Zealand’s prudential regulation, particularly since the 2020 review by the Reserve Bank, has significantly impacted the cost of house insurance for homeowners. Most insurers globally have to hold sufficient reinsurance or capital reserves to cover the risk of a 1-in-200 year catastrophe event. However, New Zealand insurers must hold sufficient reinsurance or capital reserves for a 1-in-1000 year catastrophe event. This stringent requirement drives up the cost of reinsurance, which, in turn, increases the cost of insurance for homeowners.

Balancing risk and affordability

Insurers and reinsurers are constantly reassessing their risk appetites, pricing, and capacity in response to global and local events. While this process aims to ensure the sustainability of the home insurance industry, it can result in higher premiums for homeowners. However, it’s a necessary measure to maintain the availability of home insurance coverage and spread the risk equitably across the global pool.

Enhancing New Zealand’s reinsurance market

To make our market attractive to global reinsurers, it’s essential to maintain a robust and well-regulated insurance industry with adequate pricing and risk management practices. Initiatives like the new disaster response model between insurers and the Earthquake Commission (EQC) aim to improve efficiency and customer experience, potentially enhancing New Zealand’s reputation in the global reinsurance market.

By demonstrating our commitment to responsible risk management and ensuring a fair return for reinsurers, we can continue to secure the necessary backing to protect New Zealand homeowners against the risks we face in our hazard-prone environment.

Making informed decisions 

As a homeowner in New Zealand, understanding the interconnected nature of the global insurance market can provide valuable insights into the factors influencing your home and contents insurance costs. By staying informed and working closely with your home insurance provider, you can make well-informed decisions to ensure you have adequate protection against the risks we face in our beautiful but hazard-prone country.

When choosing house insurance in New Zealand, it’s essential to know that initio is backed by industry giant IAG. This partnership ensures our financial stability and capability to pay claims, providing you with peace of mind. We understand that the most important aspect for our customers is knowing that we have the financial strength to support them in times of need.

By partnering with a financially robust provider like initio, you can rest assured that your most valuable asset is protected, even in the face of unexpected events.

Useful links

• Why has my premium changed?
• How are house insurance premiums calculated?
• Am I covered for natural disasters?
• IAG confirms reinsurance protection

Such as a bedroom or a self-contained unit/area? 

If you have a part of your property that you sometimes rent out short-term whilst you are not using it yourself, renting out part of your home means you need the right insurance to protect your entire property, rental income, and liability to any guests.

What counts as short-term renting, for insurance?

Short-term renting is lets of up to 90 days per guest stay. This could be via platforms like Airbnb or other short-term rental arrangements. When the space isn’t being rented, you or your friends and family use it. If a guest books in for a stay longer than 90 days, it is classed as long term and the property should then be insured under our Landlord Insurance product.

Does this match your situation?

• The area (unit/bedroom) is used for short-term lets between your own use.
• This could be an occasional Airbnb, but;
  • You must use the area yourself (or friends and family do) between paying guests

What insurance do you need?

For this setup, you’ll only need one insurance policy that covers your home and the short-term rental use. This is called an own home, partially rented policy, and it provides cover for both your personal use and rental activities.

Own Home, Partially Rented insurance

What does this policy cover?

Having the right policy means you’re covered for:

• Your home – Protection for your home including the area sometimes let.
• Short-term rental risks – Cover for things like accidental damage caused by guests, loss of rents and your liability to guests 
• Loss of rent – If a guest cancels or you’re unable to rent the space due to an insured event, you’ll be covered for lost income.

Get covered today

With initio, you can get a quick quote and buy insurance online in minutes, making it easy to ensure your property is fully protected. Getting a quote and buying insurance online with us is easy, but our cover is anything but basic. We offer comprehensive protection to ensure you’re fully covered.

Own Home, Partially Rented insurance

Why is this policy important?

Standard home insurance might not cover short-term renting, leaving you exposed to potential financial risks. A policy designed for partial rental use ensures you’re protected, whether you’re welcoming guests or enjoying the space yourself.

Need help? If you’re unsure about what policies are right for your situation, contact us to make sure you’re fully protected.

Get covered today with initio – Quick quotes, easy online cover.

Not quite what you’re looking for? Maybe some of these other scenarios suit you better:

• Do you have a second dwelling on your property that you rent out?
• Renting out a second dwelling solely for short-term stays
• Insurance for a non-rented second home on your property
• Second dwelling on your property that your family lives in
• Renting out two dwellings on your property

For many people, insurance is the ultimate grudge spend. Along with council rates it typically represents one of the most significant expenses associated with home ownership.

Because of the intangible nature of insurance, and its status as everyone’s most hated expense, the insurance industry often gets a bad reputation from the public. Currently, the insurance industry in New Zealand is facing all-time lowest levels of trust among the general public. Here at initio, we are challenging this and the traditional practice of insurance by making insurance easier and more accessible.

To help increase the trust we thought we would break-down the top house insurance myths we encounter:

1. “I have paid my premium, why do I have to pay an excess?”

A common grievance towards insurance companies arises from the customer’s responsibility to pay their excess come claim time. It may seem unreasonable to have to contribute the excess cost towards your claim when you have already paid for your premium. However; there are good reasons that insurance companies will charge an excess:

a) To avoid small claims

If there was no excess on insurance policies then people would rightfully be able to lodge small claims (think $80, $50 or even $10) that would make up a significant portion of total claims. Management, payment, and processing of claims is one of the largest operating costs of an insurance company.  For example, for most clunky insurance companies to process a $150 claim, is more than the value of the claim itself.  A high volume of such small claims would bloat the expenses for the insurance company, ultimately resulting in higher premiums for customers. Charging a minimum excess is the insurance company’s way of keeping premiums down while making sure they are covering the important stuff – not every broken toy or sock lost in the washer.

b) As a measure of self-insurance.

Insurers also give the option to customers of a higher excess above the minimum. This is a means of self-insurance where those that are more willing to cover additional costs towards a claim can get a reduction in premium via an increase in their excess.  Initio for example provides the option of a $2,000 house insurance excess – which was as a result of customer feedback.

2. “Insurers will screw you over with the fine-print”

Whether it’s from a bad claims experience, or a general distrust for insurance companies – people often hold a grudge against insurers. Customers often think insurers are looking for a way out of paying  claims and that they will use the fine-print to do it. This may reign true, however will usually reference back to conditions included in the policy wording – and hence the insurance agreement.

The problem isn’t the fine print, the policy wording didn’t change from when the cover was started.  The argument is more around the interpretation of the policy and we are the first to agree that this isn’t always straightforward.  Policy wordings need to get rid of the jargon and be written in plain english.

At initio, we are taking the Reserve Bank’s (New Zealand’s Financial Regulator) recommendation for clearer, more understandable insurance very seriously. We have prioritised easy to understand policy wordings, compiled to clearly show details of our customers cover, and published real life examples of claims we have paid and scenarios that are not claimable.

Whilst we don’t expect everyone to read each policy wording back to front, there are parts of our policy that are very important to be known to the customer. Therefore it is important for people to take time to get familiar with the useful policy information we provide so that they are not left surprised with unexpected conditions in the event of a claim.

To read our full Home and Contents policy wordings please visit the following links:

Home Insurance

Contents Insurance 

For a useful comparison between our policy wording and other covers across popular insurers in New Zealand, visit https://initio.co.nz/#comparison

3. “Insurance companies are just there to make profit not friends”

Perhaps the most truthful stereotype we hear is that people believe insurance companies are there to make money. While this is true; companies have an obligation to shareholders to return a profit, they also have an obligation to pay claims. If insurers were forced to pay out the same amount that they received in premiums and were essentially not there to make money, no insurance companies would exist. Like any business there are various operating costs for an insurance company that include managing claims, administration costs, reinsurance (insurance for insurance companies) and many more.

An insurance company will aim to adjust their price and policy so that the amount paid out for claims is less than that received in premiums. The proportion of this is called the insurer’s ‘loss ratio’. Historically, a domestic house insurer might set up their strategy and pricing to aim for a loss ratio of 60%. Then once the costs of operating the company (including significant re-insurance costs for widespread earthquake losses) are deducted, an approximate profit margin of 3-8% on the original premiums received might be earned by the insurance company – although this varies based on good and bad years.

When you purchase insurance you are buying a product that gives you peace of mind that you are covered when disaster strikes. Like any other product you buy, the seller needs to make a profit to survive.  Effectively with insurance you are pooling your premiums with other customers to receive protection should something go wrong.  The insurance company is the administrator of these funds and takes the risk (and the margin) of doing so.

4. “You’re better off not bothering with insurance and having your own emergency fund”

Perhaps a myth popular with those who most distrust insurance companies is that you are better off forgetting about insurance completely and putting away the money you save on premiums each year into your own ’emergency fund’. This is the most extreme case of self-insurance. This could certainly be a practical solution for the most disciplined people with a comprehensive approach to reducing their risk. However, there are some obvious pitfalls and major challenges to this approach.

You are likely to experience several years where you are effectively un-insured while you build up your fund. After a number of years have passed you might have saved enough to adequately cover minor losses. However, it will take many many years; if not your whole life, to accumulate enough for a worst case scenario loss.  If you put aside $1,500 a year for 50 years at current interest rates you would save $127,000, which seems reasonable, but when you adjust for inflation, that $127,000 only represents $47,000 of todays money.   Would that be enough to replace your home and contents in a total loss fire? And could you trust yourself not to ‘borrow’ from the fund? The decision to take out insurance can have a life changing effect on you in the event of a disaster – for the better or the worse.

Remember that when you purchase insurance, not only are you buying cover when things go wrong – but you are obtaining piece of mind to enjoy a less stressful life.

Useful articles

• Top five mistakes to avoid when insuring property
• Five fundamentals of house insurance

Renting out your home in New Zealand can be a great way to generate extra income, but it comes with responsibilities and risks. Whether you’re considering becoming a landlord for the first time or looking to optimise your rental process, this guide covers some of the key aspects you need to know.

1. Consult the experts 

• Refer to Tenancy Services for the latest landlord specific advice such as healthy homes and legal requirements
• Join your local property investor association – New Zealand Property Investors Association have various branches throughout New Zealand.
• Consider the benefits of engaging a professional property manager.  
• Companies such as myRent provide valuable resources in terms of finding tenants and managing your properties

2. Understanding your responsibilities as a Landlord

As a landlord i​​n New Zealand, you have legal obligations under the Residential Tenancies Act such as:

• Ensuring the property is healthy and safe (meeting Healthy Homes Standards)
• Providing and maintaining the property in a reasonable condition
• Lodging the bond with Tenancy Services
• Conducting rent reviews and providing proper notice for increases
• Keeping proper records of agreements, payments, and inspections

3. Deciding on long-term vs. short-term rentals

You need to determine whether to rent your property on a long-term basis or as a short-term holiday rental (e.g., through Airbnb).

• Long-term rentals provide steady income and more security but require ongoing property management.
• Short-term rentals can yield higher returns in peak seasons but involve more effort, cleaning, and compliance with local council rules.  They also require commercial insurance which can be more costly.

4. Setting the right rent price

Research similar properties in your area to set a competitive rental price. Consider:

• Location and amenities
• Property size and condition
• Market demand
• Seasonal fluctuations

Websites like Trade Me Property and Tenancy Services can help you gauge market rents in your area.

5. Finding and screening tenants

To attract good tenants:

• Try advertising on Trade Me Property, Facebook Marketplace, and local community boards or use a Property Manager.
• Conduct thorough tenant checks, including credit history, previous landlord references, and employment verification.
• Use the resources provided by Tenancy Services  or companies such as myRent to ensure all legal terms are covered.

5. Understanding insurance needs

Landlord insurance is essential to protect your property from risks like tenant damage, loss of rent, and liability claims. Standard home insurance will not cover rental-related risks, so consider a comprehensive landlord insurance policy from specialist providers like Initio.  Take note of your policy conditions such as specific Landlord obligations around property inspections and tenant checking.

6. Property maintenance and inspections

Regular maintenance keeps your rental property in good condition and prevents costly repairs. You should:

• Conduct routine inspections,  Tenancy Services have templates that guide you through what to check.  myRent also have great resources in that regard.
• Respond promptly to repair requests
• Budget for ongoing maintenance costs
• Have a system in place or with a provider such as myRent which allows you to track rent payments 

7. Managing tenancy agreements and ending a tenancy

Ensure tenants sign a legally binding Residential Tenancy Agreement outlining rent, bond, and house rules. When ending a tenancy, follow proper legal processes, including giving the correct notice periods and handling bond refunds properly.

8. Understanding tax implications

Rental income is taxable in New Zealand. You may also be able to claim expenses such as:

• Property management fees
• Mortgage interest (if applicable)
• Repairs and maintenance
• Insurance and rates

Check with an accountant or Inland Revenue (IRD) for guidance on tax obligations.

Final thoughts

Renting out your home can be a rewarding financial decision, but it requires careful planning and management. By understanding your responsibilities, pricing your rental appropriately, and securing the right insurance, you can ensure a smooth and profitable experience as a landlord.

If you’re considering renting your property, take the time to research and seek professional advice where needed to avoid common pitfalls.

Articles of interest:

• What does landlord insurance cover?
• Landlord insurance fundamentals
• Guide to landlord insurance
• What is landlord insurance?
• Landlord insurance for multiple rentals
• Can I complete remote property inspections?

If you own a property with two dwellings and rent them both out long-term (90 days or more per tenant), it’s important to have the right insurance to protect your investment. Whether the dwellings are separate or physically connected will determine the type of insurance you need.

What type of rental arrangement is this?

• Two homes, same site
• Both rented on long-term residential leases

What insurance do you need?

The right insurance depends on whether the dwellings are physically connected or separate:

If the dwellings are NOT physically connected (e.g., separate buildings on the same section):

• You’ll need two landlord insurance policies, one for each self-contained dwelling. Each policy will cover the specific rental risks of that property, including tenant-related damage, liability, and loss of rent.

Start by buying one landlord insurance policy, then add a second through your dashboard (instructions below)

Buy Landlord Insurance

If the dwellings ARE physically connected (e.g., one upstairs and one downstairs, or connected by a wall, roof, or garage):

• You can use our Multi-Unit Rental policy, which provides coverage for both units under a single policy. you’ll need to state the number of self-contained dwellings at the address. This helps ensure you get the right level of cover for your property setup. 

Buy Multi-unit Insurance

How to add a policy for a second dwelling on the same title:

1. Login to your dashboard and click on the ‘house insurance +’ button

2. Search for your home address & ‘see full quote’

   

3. On the full quote screen, click ‘back’ to edit the second dwelling’s details if needed.

   

   • If both properties are the same size or the details are already correct, no changes needed.

4. Once you go back, edit the property details, then click ‘continue’

   • This will adjust the quote to reflect the correct figures for the property.

Finish the quoting process from here per the usual process – Easy!

You can get a quick quote and buy insurance online in just a few minutes with initio. Make sure you choose the right policy based on whether your dwellings are separate or connected. Getting a quote and buying insurance online with us is easy, but our cover is anything but basic. We offer comprehensive protection to ensure you’re fully covered.

Not quite what you’re looking for? Maybe some of these other scenarios suit you better:

• Do you have a second dwelling on your property that you rent out?
• Renting out part of your home short-term
• Renting out a second dwelling solely for short-term stays
• Insurance for a non-rented second home on your property
• Second dwelling on your property that your family lives in

At initio, we’re all about providing clear and simple insurance solutions that fit your needs. However, there are a few types of insurance we don’t handle. Here’s a quick rundown of what we don’t currently cover, so you know exactly where we stand.

Stand-alone contents 

We understand that protecting your belongings is crucial. However, initio currently does not offer stand-alone contents insurance. Contents insurance is only available as an add-on to a home insurance policy for the same address as the insured property. If you are renting and only need to insure your contents, initio does not have an option for you at this time.  If you would like a quote for contents cover for your existing home insured with us, please view the add-on option/quote by logging into your initio dashboard and using the ‘change’ options.

Life products such as Life Insurance, Income Protection and Mortgagee Protection 

We do not offer life or income protection insurance. Life insurance ensures your loved ones are financially supported in the event of your passing, covering expenses like funeral costs and living expenses. Income protection insurance provides a regular income if you can’t work due to illness or injury, helping cover essential living costs. For these needs, we recommend consulting with specialised providers to get the comprehensive cover and peace of mind you deserve.

Travel 

Planning a trip can be exciting, but it also comes with its own set of risks. Unfortunately, initio does not offer travel insurance. This means we do not cover trip cancellations, lost luggage, or travel-related disruptions. For these specific needs, we recommend looking into specialised travel insurance providers who can offer you the necessary peace of mind for your journeys.

Medical 

Health and well-being are paramount, but initio does not provide medical insurance. Whether you need coverage for regular check-ups, emergency medical care, or long-term health treatments, you will need to find a dedicated health insurance provider. Our focus remains on property and vehicle insurance, ensuring that your primary assets are well protected.

Homes in transit

Moving homes can be a stressful experience, and ensuring your belongings are covered during the move is important. Unfortunately, initio does not offer insurance specifically for homes in transit. This means we do not cover any damage or loss that might occur while your belongings are being moved from one property to another. For coverage during your move, you will need to explore options with specialised moving insurance providers or seek transit cover from a broader insurance policy that includes this specific protection.

Contract works 

We don’t have a product at into for contract works.  If you’re renovating and making any structural alterations to your property, a standard house insurance policy won’t cover construction-related losses. For this, you need a Contract Works policy. This specialised insurance covers both the work being done and your home against construction-related losses. This can include issues like water damage from exposed cladding or structural damage caused by the renovations.

To make this easy for you, we’ve partnered with Builtin to offer the perfect Contract Works insurance solution. With Builtin, you can ensure that your renovation project is fully protected.

Body corporates

We cannot insure properties that are owned under a Body Corporate. Our cover is designed for domestic residential houses that have a single owner. Under a Body Corporate, there is a manager that collectively is responsible for insuring all the units on behalf of each owner. This is common where there’s a large number of living units, such as an apartment block.

Commercial/Business

We don’t provide commercial insurance at this time. Our primary focus is on landlords and homeowners, ensuring your residential properties are covered with the best possible policies. Commercial or business insurance is designed to protect businesses from a variety of risks. This type of insurance typically includes coverage for property damage, liability, and employee-related risks. It can protect against losses from events such as fires, theft, and lawsuits, and can also include specialised coverage like business interruption insurance, which helps cover lost income if your business is temporarily unable to operate. For business insurance needs, we recommend seeking specialised providers to get the tailored coverage your business requires.

Vacant Lots/Land or Lots/Land with only an Outbuilding

We only insure homes you can actually live in — so if it’s just a patch of grass, a shed (or a future dream build), we can’t provide cover until there’s a house on it.

Pet Health Insurance 

While we love pets as much as you do, we don’t offer pet insurance. We recommend checking with providers who specialise in this area to find the best cover for your furry friends. We do, however, cover damage caused to your property by pets.

Motorcycles, caravans, tractors and classic cars 

Generally speaking, motor vehicles (including quad bikes, motorbikes, and tractors) aren’t covered under your initio contents insurance. The only exception is for small, domestic-use vehicles listed in the policy definition of contents, such as electric wheelchairs, mobility scooters, golf carts, or children’s motorbikes under 50cc that are used only off-road. If you want cover for larger or road-legal vehicles like quad bikes, motorbikes, or tractors, you’ll need to arrange a separate motor vehicle insurance policy with a specialist provider, as this isn’t something initio offers.

Boats, jet skis, and other watercraft

Our cover doesn’t extend to boats, jet skis, or other types of powered watercraft. These fall outside the definition of household contents and need their own specialist cover. If you own watercraft, you’ll need to arrange a separate policy designed for marine risks, as they aren’t included under your home, landlord, or holiday home contents insurance.

Why these limitations?

Our goal is to offer you the most effective and straightforward insurance solutions. By focusing on specific areas, we ensure that our policies are comprehensive, easy to understand, and tailored to your needs. We believe that doing a few things exceptionally well is better than spreading ourselves too thin.

What we DO cover

For pretty much everything else, we’ve got you covered! We provide a wide range of insurance options to keep you protected. If you’re not sure which is the best cover for your situation, we recommend you visit our ‘help me choose’ page. Here’s a simple breakdown of our current insurance options:

• Home and contents
• Landlord
• Holiday homes
• Multi-unit rentals
• Own home, sometimes rented out
• Two dwellings on the same property
• House flip
• Vehicle insurance (only available to current policy-holders)

What we do best

We pride ourselves on providing excellent cover for your property. Our policies are designed to be simple, effective, and hassle-free. We’re always here to help you find the best solution for your insurance needs.

If you have any questions or need further clarification about what we cover, feel free to reach out. We’re here to help!

Final thoughts

While we do cover a whole heap of things, here are a few others we also don’t cover, just in case you were wondering:

• Pet dragons – Sorry, your fire-breathing friend is a bit too hot to handle.
• Alien abductions – We haven’t quite figured out how to insure intergalactic incidents yet.
• Time travel mishaps – If your time machine breaks down in 2050, you’re on your own!
• Unicorn stables – Magical creature houses aren’t covered, but we admire your imagination.

If none of this applies to you…

Great! You’re probably exactly the kind of property owner we can cover. Getting a quote takes just a minute, and there’s no paperwork or waiting.

Get a quote

• What is initio and how does it work?
• Initio’s policy wordings
• Technology you can trust
• How do I add contents insurance to my policy?

This guide answers common questions about landlord insurance, tenants, and property use — including how family arrangements or business activities can change your cover.

Do I need to notify you when my tenants change?

You don’t need to notify us every time a new tenant moves in. But to stay covered under your landlord insurance, you must meet the landlord obligations:

• Choose tenants carefully
• Keep records of pre-tenancy checks
• Complete inspections at least every 3 months, and at every change of tenants (with written records and photos kept on file)

You can review these in more detail on our landlord obligations guide.

“Tools like myRent can help with tenant checks, tenancy agreements, and ongoing property management — it’s a handy way to stay organised and meet your landlord obligations.”

If the change involves a different type of tenancy – for example, switching to short-term guests or another arrangement that could affect your cover – please let us know so we can check you’re on the right policy wording. You can also compare our options on the ‘help me choose’ page

My family member ‘rents’ the house – what kind of policy do I need? 

If a family member lives in the home and pays rent under a tenancy agreement, you’ll usually need landlord insurance. This gives you cover for things like loss of rent or intentional damage by tenants. Read more on our landlord insurance page.

If it’s a second dwelling on your property that a family member lives in permanently and you don’t want/need specific landlord benefits such as loss of rents , this usually requires a separate own home policy for each dwelling. More details are here: second dwelling – family lives in it.

Examples:

• Your brother pays rent and you want to cover that rent income → landlord insurance
• Your parents live in a granny flat rent-free → own home insurance

What if my tenant wants to run a business from my rental?

Your tenant is responsible for arranging their own commercial insurance to cover their business activities. This is separate from your landlord insurance and not something we provide. See our guide: When do I need commercial insurance? 

If the business changes the way the property is used (for example, a salon, office, or childcare), it could affect whether we can provide cover.  Get in touch with us if you’re unsure – we’ll be happy to review your situation with you. 

Ready to make the switch to initio? Start with a quote

Related articles

• When do you need commercial insurance?
• Landlord obligations
• Have a second dwelling that your family lives in?
• Help me choose the right insurance
• Landlord insurance for multiple rentals

If you’re new to the rental property game, you’re probably searching the internet, asking yourself, what does landlord insurance cover?  It’s important to find the right policy that covers you if things go wrong – whether it’s tenant-related damage, loss of rent, or unexpected repairs. The last thing you want is to be caught short with the wrong type of policy from an insurance provider that doesn’t specialise in landlord insurance. 

That’s where initio comes in.  We live and breathe landlord insurance, making sure your rental property is in the hands of a provider that understands the challenges landlords face.

Owning a rental property can be a great investment, but it’s not without risks. That’s why having the right landlord insurance is essential – it helps safeguard your investment from unexpected costs, such as tenant damage, legal claims, and loss of rental income.

What landlord insurance with initio typically covers:

• Loss of rent – Cover for lost rental income if your property becomes uninhabitable due to damage or if tenants leave unexpectedly
• Deliberate damage – Protection against intentional damage or theft caused by tenants.
• Meth contamination – Cover for decontamination costs and additional rent loss during cleanup.
• Landlord contents – Coverage for furniture, appliances, and other items you provide in the rental.
• Replacement cover – Full rebuild protection up to your insured sum.
• Legal liability – Protection against legal costs if your property causes damage or injury.
• Excess-free blocked pipe cover – Coverage to unblock underground pipes without paying an excess.
• Hidden gradual damage – Cover for gradual water damage caused by hidden water pipe/tank leaks.
• Excess-free keys and locks – Replacement of lost or stolen keys and locks with no excess to pay.

Looking for more details?

Head over to our landlord insurance page for some great foundational information and to see how we can help protect your rental. You’ll also find a range of helpful landlord-specific support articles, along with our guide to the fundamentals of landlord insurance, for further reading. If you’re looking for more specific details about initio’s landlord insurance policy, you can download the full wording from our policy wording page.

With the right cover in place, you can rent out your property with confidence – without stressing about the ‘what ifs.’

Useful information

• Guide to landlord insurance
• Understanding landlord insurance
• Landlord insurance