A recent incident involving a property investor highlights the importance of transparency with insurers when altering property usage, particularly through platforms like Airbnb. According to a report by RNZ, the investor faced complications after his insurance claim was partially denied due to failing to disclose the property’s Airbnb listing status.
The investor, who initially rented out the property before listing it on Airbnb in 2018, sought redress from Financial Services Complaints Limited (FSCL) after his claim for income loss stemming from weather damage was rejected. Despite asserting that he had informed his broker about the change, no record of such notification could be found.
While the insurer covered the physical damage to the property, they declined compensation for income loss. FSCL emphasized that even with documented communication to the broker, the outcome might not have changed. The insurer’s assessment attributed the income loss to the investor’s oversight, estimating it at $1,860. Factors such as the investor’s failure to adjust insurance coverage for Airbnb rental and potential increased premiums over six years were cited as offsetting any compensation for income loss.
Sarina Gibbon, general manager of the Auckland Property Investors Association (APIA), highlighted a common misunderstanding among investors regarding the need to update insurers about changes in property use. She emphasized the necessity for property owners to inform insurers promptly to avoid policy invalidation.
“This issue is more widespread than commonly realized,” Gibbon noted, emphasizing the broader implications for property owners renting through unconventional channels.
The incident comes amidst discussions around legislative changes affecting property investors. APIA recently expressed support for the Residential Tenancies Amendment Bill, particularly its provisions concerning pet ownership in rental properties. The bill proposes reforms that would give tenants greater rights regarding pet ownership, aiming to enhance transparency and fairness in landlord-tenant relationships.
Gibbon stressed the importance of these reforms, underscoring the need for clarity and fairness in rental agreements, including provisions protecting tenants from arbitrary eviction over pet ownership.
“As we move towards more inclusive rental practices, it’s crucial to ensure that all stakeholders are informed and protected,” Gibbon remarked, pointing to the proposed introduction of a pet bond as a measure to safeguard landlords against potential damages.
While supporting the bill’s intent, APIA also acknowledges the need for refinement to address practical challenges associated with pet ownership in rental properties.
“We recognize the complexities involved and seek to strike a balance that benefits both tenants and landlords,” Gibbon concluded, reflecting on ongoing efforts to promote responsible rental practices in New Zealand’s evolving housing landscape.
