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Talk to your insurer before leasing your home over summer

The Insurance Council is advising holders of home and contents insurance to check with their insurers before renting their properties out over the summer.

The Council is warning consumers that if they don’t speak to their insurers about their intentions, they may not be covered if their tenants cause damage or take possessions from the property.

“Summer is a popular time in New Zealand for getting away for a break and many people look to rent properties short-term through services like Airbnb and Bookabach,” said Insurance Council Chief Executive, Tim Grafton. “What the owners listing those properties often don’t realise is that if they don’t tell their insurer beforehand and something goes wrong, they may not be covered – particularly in cases of theft of possessions by tenants.”

House policies are commonly underwritten on the understanding that the property will be lived in full-time by its owners. Renting to anyone else, even for a few days, increases the risk of damage as often even the most trustworthy tenants don’t take quite the same care of a property as most owners. Insurers, therefore, need to know if a property is to be rented short-term as it increases the risk they’re taking on.

Likewise, contents insurance often does not cover theft by people allowed to stay on a property by its owners, such as house guests or housesitters. Should someone tenanting a house over the summer steal the possessions of the home’s owner, an insurer may decline cover on the basis the tenants were allowed to stay.

“It’s always better to talk to your insurer to understand exactly what you are and aren’t covered for when circumstances change than to make assumptions,” said Grafton. “A little bit of extra work now could mean the difference between a very happy and a very stressful holiday period.”