Multi-unit insurance option

Question from Neil updated on 29th February 2016:

I own a rental property in Auckland which comprises of two, two-bed units on one title.They have separate power/land lines but one council rate bill and one water bill. The units are currently insured as two separate houses, as instructed by the insurance company, for around $1100. Is it possible to reduce the cost by insuring as multi units?

Our expert Myles Noble responded:

My thoughts are that the house could be insured under one policy (as it is on one title) but needs to be noted as two units so the correct FSL and EQC levies can be charged. There would be a premium saving in doing this. However, the disadvantage is that any policy sub-limits that are not per unit but are per policy - e.g: hidden gradual damage would apply.

Myles Noble is head of claims and earthquake response for Crombie Lockwood. He also holds various advisory board positions in the insurance industry.

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