Seeking landlord insurance

John asks:
(updated on Tuesday, January 21st 2014)

Hi, I'm after some advice please as I'm about to rent out my two-bedroom house and would like to know what the best insurances to have are so that I'm covered for tenant damage to both inside and outside of my property?

Our Experts Answer:

Firstly, inform your insurance company that the house is a rental or they may assume the dwelling is owner occupied. This will ensure the appropriate premium is charged and the additional risks associated with rental properties are taken into consideration.
Accidental damage by tenants is generally covered if the insurer is aware the house is a rental property, like if the tenant accidentally drops a hot iron onto lino flooring causing a burn mark. However of greater concern to all involved is ‘malicious’ or ‘intentional’ damage by tenants. Some policies automatically provide cover for this type of damage while other allow for cover to be purchased for an additional premium. However, many policies give no cover at all for this type of loss. There are also sometimes conditions known as “Landlord’s Obligations” and these need to be met, you will likely have to provide proof of this at claim time. These conditions may include obtaining satisfactory references and carrying out regular property inspections. While this can seem a bit over the top, these are acts that a prudent landlord would reasonably be expected to carry out even if they didn’t have insurance as a back-up. 
Damage caused by methamphetamine (aka P) labs is also regarded as malicious and intentional.  If your policy excludes this kind of damage it will also exclude P lab clean-up costs which can easily reach $20,000 to $30,000. Some insurers provide a limited amount of cover while others with more exclusive products provide incentives for landlords to install a meth production detection device and in return will provide unlimited cover for clean-up costs. While the house is being repaired there is every chance you may not be able rent it out, so you are also losing rental income. Make sure your policy includes a ‘Loss of Rent’ benefit which includes income lost as a result of a malicious damage.

Select Home Loans 4.29
HSBC Premier 4.39
ICBC 4.39
Heartland Bank - Online 4.40
China Construction Bank Special 4.45
SBS Bank Special 4.55
Kainga Ora 4.57
Co-operative Bank - First Home Special 4.75
TSB Special 4.85
AIA 4.85
Co-operative Bank - Owner Occ 4.85
Select Home Loans 4.86
Heartland Bank - Online 4.90
TSB Special 4.99
ICBC 5.09
HSBC Premier 5.15
SBS Bank Special 5.19
China Construction Bank Special 5.19
AIA 5.35
Co-operative Bank - Owner Occ 5.35
First Credit Union Special 5.45
Unity 5.55
Select Home Loans 5.20
HSBC Premier 5.89
ICBC 5.89
SBS Bank Special 5.95
TSB Special 5.99
BNZ - Classic 6.19
Kiwibank Special 6.29
Resimac 6.33
China Construction Bank Special 6.35
Westpac Special 6.39
Kainga Ora 6.43
Select Home Loans 4.09
Heartland Bank - Online 4.10
Pepper Money 4.49
Liberty 4.84
TSB Special 4.89
Kiwibank Special 5.00
ICBC 5.25
Kainga Ora 5.43
Kiwibank 5.50
China Construction Bank 5.50
Kiwibank - Offset 5.50