RWC rental alert - tell your insurer first

Homeowners who use their property to make a quick buck during the Rugby World Cup could be forced to pick up the tab if their home is damaged or property stolen.

Insurance Council of New Zealand chief executive Chris Ryan said people needed to err on the side of caution and alert their insurer when making plans to let their property.

Some insurers spoken to said they would not pay out for theft of property and may only cover accidental damage if the customer switches to a rental policy with a higher excess or premium.

Intentional damage cover could be sought at a price from some insurance companies.

"They may say for a certain price we will cover you or they may say you have been a customer with us for a long time and, provided it's not deliberate damage, we will cover you," said Chris Ryan.

Generally speaking the higher the risk, the more a customer would need to pay in premiums or excess, he said.

The repercussions for someone whose home was destroyed by fire through negligence by a tenant could be serious if that person had not informed their insurer, said Ryan.

Ryan said it was worth people calling their insurer to check on the terms and conditions of their policy, which varied between companies.

State Insurance executive general manager Mary-Jane Daly said insurance was only part of the solution for people wanting to protect their home.

"We recommend that people receive some form of bond from the renters and have a signed agreement with them too."

It was also worth storing valuables offsite - particularly those with sentimental or high value such as jewellery, she said.

Daly said theft by a tenant was not covered in most policies, regardless of the insurer.

AMI spokesman John McSweeney said AMI was advising customers who wanted to use their home as a short-term rental during the cup, to stay on their existing policy.

The policy would cover accidental damage by a tenant, but not intentional damage or theft.

A customer could pay extra for deliberate damage of property by a tenant if they moved to a rental policy, McSweeney said.

Property Investors' Federation vice-president Andrew King recommends homeowners seek a bond of up to four weeks' rent, as a safeguard.

"You can take out extra insurance cover which will cover for malicious damage but if someone steals from you, generally you would not be able to cover yourself for that because you have actually allowed someone into your home," he said.