If you plan on renting out a room or your house to short-term tenants, there are some things you need to consider. One of the most important is how it
will affect your insurance cover.
Non-Disclosure
Failing to tell your insurance company about the change in occupancy could result in non-disclosure; which in turn could result in non-payment of a claim.
Make sure you let your insurer know if you intend to rent a room or home to short-term tenants or guests. A house, rental or landlord insurance policy
designed for long-term tenants is unlikely to cover you.
Getting the right cover
Just because you’ve got insurance, and you have disclosed the occupancy, it doesn’t mean that you are covered. You will need to specifically ask your insurer
about policy coverage whilst short-term tenants / guests are staying in your home. Some of the key questions to ask are:
- Any cover for damage/theft by short-term holiday rental guests?
- Is there a cover for lost rental income following a damage to the property?
- Will there be cover if guests contaminate the home with methamphetamine?
Simply continuing to insure the home isn’t always enough. You want to make sure that you have the right insurance cover for the increased risk exposure.
If your existing insurer cannot provide this cover check out initio.co.nz who specialises in rental and holiday home insurance. APIA members receive a discount.
If your home or unit is used solely for short-term tenants it is unlikely to meet the EQC (Earthquake Commission) definition of a home. This is because it is viewed as more like a motel, and will require a commercial insurance policy.
