Insurers warn on risky Cup rent deals

Eden Park and surrounding houses. Photo / Brett Phibbs

Homeowners who rent out their property for the Rugby World Cup without telling their insurance company will not be covered if their house is trashed, insurers say.

They are telling residents who are hosting rugby fans to let the insurance company know - or risk getting caught out if their house is damaged by its temporary occupants.

AMI Insurance spokesman Mark Hamer said the risk of damage changed under a rental agreement, so homeowners needed to adjust their cover to address this.

"If somebody was to rent a house, and have a party, leave the oil on the stove and burn down the house, then the act of renting that house is material change in the risk.

"Therefore the fact they haven't notified us would become an issue in relation to that claim."

Mr Hamer said homeowners who secretly rented their houses would be penalised only if the tenancy increased the likelihood of damage.

"If there was a storm and it damaged the house, the fact that it was rented would not have changed the risk - that wouldn't have an impact."

Large numbers of New Zealanders are cashing in on the arrival of thousands of rugby fans by charging steep rents - up to $20,000 a week in some top suburbs - for family homes.

State Insurance said only a handful of people had told the company they were renting out their homes in September and October.

Corporate affairs spokesman Craig Dowling said: "The extent of the problem is unknown and we want to make sure it doesn't become a problem after the fact. It doesn't show insurance in the best light and it doesn't lead to a good customer experience."

State's executive general manager, Mary-Jane Daly, said the company's home insurance policies did not cover intentional damage by a tenant, but this could be arranged for the duration of the tournament.

Residents who rented out their home for a weekend needed only to call their insurer.

Those intending to rent out their property for the duration of the World Cup would have to change their insurance policy, and possibly pay a higher fee.

ADVICE FOR RENTERS

* Disclose all changes in your tenancy to your insurer.
* Obtain verbal or written references for tenants before selecting them.
* Have a written tenancy agreement which clearly states the rental period, bond and rent payable.
* Conduct inspections at the start and end of the tenancy with the tenant present.
* Tenancy agreements should "contract in" to the Residential Tenancies Act.