A case involving a property investor who had his insurance claim partially declined due to not informing his insurer about listing the property on Airbnb underscores a larger issue, according to landlord representatives.
RNZ’s report has revealed that the investor sought assistance from Financial Services Complaints Limited (FSCL) after his claim for income loss from weather damage was rejected. Originally tenanted, the property was listed on Airbnb in 2018. The investor claimed to have notified his broker, but there was no record of this notification.
The insurer covered the damage but not the income loss. FSCL noted that even if the investor had proven the communication with his broker, compensation would not have been granted.
“We noted that the insurer's assessor calculated the loss of income at only $1,860. We would have then taken into account that [he] had contributed to his loss (by at least half) because he had not seen and queried that the occupancy of the property on his schedule was noted as ‘tenanted,’” it said, as reported by RNZ. “We would have also taken into account that [he] would have had to pay additional premium for six years to have the property insured as an Airbnb. These two factors combined would likely offset all the possible $1,860 compensation for lost income.”
Sarina Gibbon, general manager of the Auckland Property Investors Association (APIA), indicated that many investors may not realise they need to inform their insurer when listing a property on Airbnb or renting through social housing providers.
She stressed that changes in property use should be reported to insurers to avoid invalidating policies.
“More often than not, people will not be mindful and consider that insurance piece. It’s a bigger problem than we would like to think,” she said, as reported by RNZ.
The advice for property investors comes after the APIA voiced support for the Residential Tenancies Amendment Bill, which introduces significant changes to pet ownership in rental properties.
This bill aims to restrict landlords from outright banning pets, fostering greater transparency between landlords and tenants.
Under the proposed legislation, tenants would have the presumptive right to keep pets in rental properties, removing the need for tenants to conceal pets or lose rental opportunities due to pet ownership.
“Everything will be above board,” Gibbon said. “That’s the least our pets deserve – to not be treated as a dirty secret. This right is further strengthened by Section 54, which protects a tenant from having their tenancy terminated for having a pet or even asking to have a pet at the rental property.”
The bill also introduces a pet bond, offering landlords a financial safeguard against potential pet-related damages. This bond could encourage landlords to consider pet-owning tenants who might otherwise be ideal candidates for their properties.
However, APIA acknowledges potential challenges with the new rule.
“We understand that there are aspects of the rule that can be refined to better address the realities of pet ownership in rental properties,” Gibbon said.
