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Top 5 things to check for in your Landlord Insurance policy

As a landlord, the risks to which you are exposed are often not covered by a standard insurance policy. When taking this next step on the property ladder it is important to have the right Landlord Insurance cover in place to save yourself from headaches down the track.

Does your policy cover your tenanted house? While it seems obvious, a standard house insurance policy is designed to cover owner occupied homes, if you were to make a claim and the insurer discovered the house was tenanted your claim could be declined. If you have listed your holiday home for rent or if you have recently moved out of your own home and tenants have moved in, make sure you have notified your insurance company, and they have the correct Landlord Insurance cover in place.

Does your policy cover loss of rents? Following a claim for property damage to your house, there will likely be a period where it is uninhabitable while you wait for the repairs to be carried out and completed. You are going to want your Landlord Insurance to pay for your lost rental income during this time. Make sure that the policy will pay out for at least 12 months, and that the limit is large enough to cover the week rent – ie $20,000 over 12 months is up to $385 per week.

Does your policy include cover the carpets? House insurance policies often only cover floor coverings that are glued to the floor, while most carpet is tacked. Therefore, it is important that your Landlord Insurance policy includes cover for your contents. Make sure this amount is enough (we recommend at least $20,000) to cover your appliances, carpets, drapes, blinds and other furniture that remains in the house while it is tenanted.

Does your policy include damage caused by your tenants? Generally, your insurance policy will exclude deliberate damage caused by a person living at the house, so if your tenants intentionally damage your house you may not be covered. A good Landlord Insurance policy will include cover for malicious or deliberate damage by tenants.

Does your policy continue if your house is vacant? Some policies will cease cover if the house is vacant. So, if it takes longer than expected to tenant your house, or if you have no bookings at your holiday home over the winter, you might not have any insurance cover. Look for a Landlord Insurance policy that will continue to provide cover even while the house is unoccupied.

If your tenants are holding the keys to your retirement savings, you don’t want to leave anything to chance. The initio policy was designed specifically for rental houses and holiday homes, so you can rest easy knowing that one of your largest assets is in safe hands. To get a quote visit initio.co.nz.