Short-term rental damage claim

Question from Lena updated on 22nd May 2015:

My tenant’s child has accidentally broken a large window, they have asked me to repair it through insurance. I don't have landlord insurance and my property is not listed with my insurance company as a rental because the tenants are only in there for a short period. Do I pay for the broken or window or do they? Or can I claim on my standard house insurance?

Our expert Myles Noble responded:

Your question raises a couple of matters. Firstly, there has been a recent case under the Property Law Act ("Holler vs Osaki") which prevents a landlord from seeking recovery of costs from their tenant where he/she has accidentally damaged the landlord’s property. This means you may not be able to claim costs for the broken window back from your tenant. Secondly, insurers always need to know the occupancy type as this can increase the chance of damage to the home, so will affect the premium they charge and/or the excess. For example, rentals/holiday homes are generally perceived as a higher risk to insurers than owner occupied homes. Therefore attract higher premiums and excesses. Since you haven’t declared to your insurer that your home is rented – albeit for a short term – they may decline your claim for non-disclosure of a material fact. However, given it’s a short-term rental (and assuming it’s normally owner occupied and not rented), hopefully they may look kindly on your claim or apply the terms they would have if they had known that the property was tenanted.

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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