AMI Insurance is urging new and prospective landlords to take their responsibilities more seriously, warning that informal or relaxed management practices could put both properties and financial security at risk.
Research commissioned by AMI shows that 15% of tenants say they do not receive regular property inspections, while more than half contact their landlord directly rather than through a property manager. More than a quarter of renters say their landlord is someone they know personally.
AMI said nearly half of New Zealand’s rental properties are owned and managed by non-professional landlords, most of whom own only one investment property. Many tenants also rent from friends or family members, creating informal arrangements that may lack proper oversight. Stephannie Ferris, AMI executive general manager claims, said these relationships can leave both landlords and tenants exposed if owners do not follow the necessary steps to protect their properties.
“With interest rates dropping, and the market becoming more affordable, we know more aspiring property investors are considering purchasing a rental home. We want to make sure they are taking the right steps to protect their property and interests,” Ferris said. She said personal relationships should not replace the need for proper checks before tenants move in and regular, recorded inspections. “This is particularly important to ensure any insurance claims you need to make on your insurance go as smoothly as possible.”
Ferris said specialist landlord insurance is becoming increasingly important given the financial risks rental providers take on. She said policies such as AMI’s Landlord Home and Contents Cover are designed to help investors manage common risks, including damage to chattels, lost or defaulted rent, and clean-ups after abandoned tenancies. They can also reduce the financial impact of downtime between tenants while repairs are carried out.
AMI data shows claims involving loss-of-rent cover have risen by 33% over the past 5 years. Ferris said the average claim paid for loss of rent is more than eight times the average weekly rent in New Zealand, reflecting the long repair times often required after major damage such as fire. “Most do-it-yourself landlords are unlikely to have the surplus cash needed to cover mortgage and other expenses if major repairs… are necessary,” she said.
Ferris said getting organised early can make a substantial difference. “Getting smart about protecting assets ahead of time means landlords can do right by their tenants and be better prepared to protect property and their own wealth in the long-term,” she said.