Like any other valuable asset, you need to protect your rental property investment.  All lenders will insist that your property is insured in any case, to protect it against an unforeseen disaster.

There are two main types of property insurance:

• Indemnity – where the level of cover is determined by the market value of the property. This puts a limit on the amount you receive if for example, the home is burnt down.  In most cases indemnity cover is unlikely to be able to provide enough cover for the property to be replaced.
• Full replacement – where your property can be replaced to the same floor area and size.

You can take out standard home insurance, or a policy specifically designed for rental properties.  Many standard home insurance policies do not cover malicious damage by the tenant, loss of rents and contain limitations on the level of landlord chattels that are covered.

If you have standard house insurance for your rental property you will need to let your insurance company know that the house is being rented out.  If you don’t, subsequent claims may be declined.  It’s also very important that you advise your insurance company if the property is vacant for more than 60 days concurrently.

The National Bank has an ideal insurance solution for rental properties – Master Cover Rental Property Insurance.  It provides a range of benefits for landlords, including:

• Full replacement cover
• Loss of rent cover (up to eight months cover for loss of rent if the property is uninhabitable due to claimable damage)
• Legal liability of up to $2 million and fines and legal defence costs of up to $100,000.

It also includes options to protect against:

• Damage to fixtures, fittings and other chattels
• Deliberate damage by tenants
• Additional loss of rents up to $500/week if:
  o The tenant is evicted for non-payment of rent, or
  o The tenant vacates the property without notice, or
  o The property is under construction or alteration.

Visit The National Bank website for more details on Master Cover Rental Property Insurance.

TOWER Insurance Limited underwrites the Master Cover Insurance policies. The information set out above is a summary of the policy wording only. For full details of the terms, conditions and exclusions please see the policy documents available at any branch of The National Bank.

This material is for information purposes only. You should seek professional advice related to your individual circumstances. While The National Bank has taken care to ensure that this information is from reliable sources, it cannot warrant its accuracy, completeness or suitability for your intended use. To the extent permitted by law, The National Bank does not accept any responsibility or liability arising from your use of this information. Our lending criteria, terms, conditions and fees apply.