Landlord insurance

I wonder what is the most cost-effective insurance policy available for insuring a rental property. I'm only concerned with insuring against the property being seriously damaged or destroyed due either to negligence or deliberately. Eg, if mentally deranged tenant deliberately burnt the house down. I don't want to insure against non-payment of rent say, or general wear and tear on the property.

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Originally Posted by Jessie

I wonder what is the most cost-effective insurance policy available for insuring a rental property. I'm only concerned with insuring against the property being seriously damaged or destroyed due either to negligence or deliberately. Eg, if mentally deranged tenant deliberately burnt the house down. I don't want to insure against non-payment of rent say, or general wear and tear on the property.

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The property investors federation, or whatever it's called these days have a landlord's cover organised through one company, although there used to be better ones available. Find a good broker, who will shop around for you. And if serious about residential property investing you should join the federation anyway, at least for a year or so. It's good to talk to others in the same game, who have had or are having the same problems, and have shopped around for insurance and discounts etc. Back to insurance - it never covers wear and tear; that's a certainty and insurance is protection against the unpredictable. Insurance against non-payment of rent? Never heard of anyone insuring against it, although I suppose a factor company could pay you for the expected rental income and take over the collection. God only knows how much it would leave the landlord though. Probably about zero.

There have been a couple of companies targeting landlord insurance over the years. Rentsure (now bought by Runacres) and Real.
Policies can be around $350 and this is on top of the existing dwelling policy.
Most of the companies offering dwelling policies also have various landlord extensions and they can differ substantially.
Whether you take an extended landlord protection insurance policy or not, you do need to advise your dwelling policy insurer that the property is rented.

As fungus pudding said;
There is the country-wide NZPIF and in Auckland the local association is called APIA (apia.org.nz). They still recommend an insurance company, so check out their websites.
Membership to a local association is well worth it. They have regular events, networking evenings, discounts at trade stores, etc.

fungus pudding, the landlord protection insurance policies stipulate how the property must be managed, for example: how much bond (often 4 weeks), credit checks and other things like regular inspections that must done.
Then if the tenant defaults in rent, the insurance company will pay the rent to you.

The best option is usually to get a policy that extends the base house insurance policy into areas that the landlord may be concerned about; malicious damage, landlord's contents, business interruption/loss of rents etc.

I would not advise getting separate covers (dwelling and landlord) from different companies if possible; wordings are not the same between different insurers and there can be gaps in cover that buying two products from different underwriters can create. Sometimes however this can be hard to achieve if this base insurance cover is through a body-corporate because the body-Corp insurer may not offer the landlord cover you are looking for.

Don't conflate a broker with an underwriter/insurer and if arranging through a broker (nothing wrong with this, a good broker provides knowledge & advise and multiple product options) be sure they understand things like to coverage gaps above. Be clear on what you are purchasing through a broker too; sometimes they write policies through off-shore schemes and facilities who are more concerned with making money than the longevity of the customer relationship. It's your job to understand the quality of capital and the business backing the policy.