Insurance brokers will need to refresh their clients on what is and what is not covered by their homeowners’ policy as a new report found that most Kiwis are deferring maintenance on their homes, causing further deterioration.
Ian Page, an economist with the Building Research Association of New Zealand (BRANZ), said the average annual maintenance expenditure for a stand-alone dwelling should be about 0.5% to 2% of the value of the home – less than most Kiwi homeowners spend to keep their property in good shape.
Page warned that deferring maintenance on their homes would not only likely cost Kiwis more in the long term, it also creates homeowners’ insurance complications, Fairfax Media reported.
The report explained that maintenance refers to fixing smaller, wear-and-tear damage before it causes a big impact on the property’s overall condition. This includes replacing a couple of roof tiles, fixing a broken window, or calking small cracks in the masonry before they result in bigger damage.
The 2015/16 BRANZ House Condition Survey (HCS) revealed that the average cost of required maintenance on the 560 homes they assessed to bring them to like-new condition was about $13,000 per house. This figure was generally higher for rental housing and lower for owner-occupied properties.
Page said the survey findings suggest that many houses have maintenance backlogs: “We know that average expenditures on maintenance and repairs are lower than this,” he said.
Jeremy Wyn-Harris, founder of builderscrack.co.nz, explained that most Kiwis delay needed repair and maintenance because of the cost.
“When it comes to maintaining a home, there’s a big difference between what people think they can do and what they realistically can afford,” Wyn-Harris told Fairfax. “When that happens, some property maintenance is delayed, or it’ll be done to a ‘good enough for now’ standard.”
Replacing a couple of roof tiles, for example, could cost homeowners a couple of hours and less than $300. Delaying the repair, however, could result in further damage to structural timbers, which would then cost them several thousand dollars to fix – and could also potentially involve council building inspectors and compliance fees, the report said.
Homeowners’ insurance would also be of no help in such a case as it does not cover damage caused by deferred maintenance or neglect.
“This is because [the damage] is not sudden, but is often avoidable by taking normal reasonable measures to maintain property in a reasonable condition,” according to the Insurance Council of New Zealand website.
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