Article by Nigel Bowden
Insurance is one of those expenses that most times, seem to show little in the way of return. Many people have insured something of value, such as property or chattels, for years on end, and never once needed to make a claim. Sometimes, especially if money is a little tight, they walk a little on the wild side, and let their policies lapse. The fortunate ones have nothing adverse happen, but in many cases the opposite is the case. This is especially true for rental property insurance, and the media often show stories of tenants who have lost all their possessions in a fire, and were uninsured. Every property owners must have insurance to protect what is usually the largest asset they own. If that property is used to generate rental income, it is even more essential that, as a landlord, the owner has a range of insurances in place, especially if the asset is under property management Christchurch control. When arranging insurance, a landlord must ensure that the policy they are taking out provides suitable cover for a rental property. There are policies available that cover not only the building but other issues relevant to the tenancy e.g. vacancy periods and damage by tenants. The landlord should discuss their requirements with the insurance company, as they may have to provide certain details before making a claim, such as up to date inspection reports if the claim is to do with damage by tenants. If the landlord has some of their own chattels stored at the property, or actually in the residence and being used by the tenants ie the property may have been rented as furnished, insurance on these chattels is the responsibility of the landlord and are not covered by the tenant’s insurance policies. These items should be listed on the tenancy agreement as being part of the property, so there is no disputing ownership when the tenant vacates. Insurance on rental properties is a must for tenants as well as landlords. The tenant should insure their possessions under their own contents insurance policy. The landlord’s insurance will not cover them. The tenant should also consider taking out personal liability insurance to cover them if any damage is done to the rental property either by themselves or their invited guests, either unintentionally or carelessly. Many tenants take out contents insurance but don’t bother about personal liability insurance. Christchurch real estate agencies that do property management recommend personal liability insurance for tenants as it can protect them from any claims by the landlord’s insurance company should the landlord have claimed for damages caused by the tenant. Insurances give people peace of mind. Provided the extent of the cover provided by the policy is understood by the insured, there should be no misunderstanding when it comes time to make a claim, through accident, misadventure or as a result of a natural disaster.
About the Author
Christchurch real estate instructs that insurance on rental properties is must for tenants and landlords.
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