Insurance Excessess


Recent changes to legislation regarding tenant liability under insurance claims, mean that if tenants or their guests carelessly damage a rental property, they are liable for the cost of the damage up to four weeks' rent or the landlord's insurance excess (if applicable), whichever is lower. This means that a landlord must disclose any insurance excesses on a tenancy agreement and provide a statement that a copy of the policy wording is available on request by the tenant.

Diane Nelson from Real Landlord Insurance says they have been fielding calls from throughout New Zealand from Landlords wanting to increase their insurance excesses (this bringing their premiums down).

 However, they are concerned that many landlords won't of thought through the ramification of doing this, Most claims against building (house) insurance policies are for events (eg; fire, flood, water damage) that are not the result of tenant damage and therefore the landlord may find themselves in a poor position with having to pay the higher excesses they have nominated. This should be thought through very carefully before changing excesses and the landlord’s financial ability to be able to cover the excess payable.