With a growing number of visitors coming to New Zealand, more and more Kiwis are considering cashing in on the opportunity of renting out their property. It’s important to understand how short-term rentals can affect your insurance.
In some instances, insurers may not be able to offer insurance for your home if it’s permanently used as a short-term rental property. However, if it’s the odd weekend here and there, you may find your insurance already covers you. We’ve put together a few ways to help you protect your property.
1. Talk to your insurer
If you're thinking about renting out your property, it's a good idea to start by getting in touch with your insurer to let them know your plans to rent out your property. They'll help you understand how your home and contents policies would respond should something happen while guests are in your home. You’ll also need to let your insurer know if this is a one-off, occasional or regular gig for you and your home, as this may affect your cover.
2. Intentional damage and theft
Most insurance policies don’t cover the intentional loss or damage caused by a short-term tenant or guest you’ve invited into your home, so it pays to check with your insurer. With AA Insurance's Contents Insurance Policy, theft is generally covered so long as you’ve taken reasonable care in inviting guests into your home. If you would like to know how your insurer covers theft by someone you've invited into your home, it pays to ask your insurer for the heads up on this.
You might also want to think about the items you leave in your home. It’s a good idea to keep sentimental or expensive items out of the way, preferably under lock and key, to keep them safe, or take them with you.
3. Insurance
If your tenant has an accident in your home which causes an injury, then they're covered by ACC, even if they are a visiting tourist to New Zealand. In addition, some short-term rental companies such as Airbnb offer a limited level of cover under their automatic Host Protection Insurance and Host Guarantee. While it’s recommended that you read the fine print of these policies so you know the expectations and limitations, they shouldn't replace your general home and contents policies.
4. Property maintenance
Maintaining your home in good repair and keeping it secure are part of your policy conditions. If something breaks or gets damaged, try and get it repaired as soon as you can.
5. Renew and refresh
It's important to update your policy with every addition or alteration you make. For example, if you add a deck to your property, you will need to consider this in your home’s sum insured as it may add value to your home. If you buy new outdoor furniture, they can then be added to the sum insured of your contents policy so that you have enough cover to replace your belongings if you come to make a claim.
Any questions?
Now’s a great time to review your insurance. We recommend checking your details are up to date and ensuring the policy and cover you’ve chosen is right for you and your insurance needs.
If you have any questions about your insurance, need to update your AA Insurance policies or would like a quote, don’t hesitate to contact us. We’re open from 8am to 8pm weekdays and from 8am to 6pm weekends and public holidays.
This blog provides general information only and is not intended to be a recommendation or personalised financial advice. Excesses, terms, conditions, limits and exclusions apply to AA Insurance Limited’s policies. Please check the policy wording for details of cover. The provision of cover is subject to the underwriting criteria that apply at the time.