The importance of being adequately insured

The importance of being adequately insured

Cyclone Gabrielle hit and caused widespread disruption and damage across much of Hawke's Bay and Tairāwhiti region, where we manage many properties. It has been upsetting as well as inspiring to see these communities rally around each other in the post-Cyclone cleanup.

Wairoa is particularly affected, with much of the township North of the river flooded, leaving a trail of silt and destruction. One feels for the thousands of people who have borne the brunt of such a devastating disaster.

From a Property Management point of view, it is difficult to plan for such events, though history tells us that they will happen, and with the onset of climate change, one must suspect that such events may become more of a regular occurrence.

As a company, we pre-empted issues that we could deal with. Even though there are always things that could be done better, overall, we handled the situation as best we could, considering we managed thousands of properties in the Cyclone's projected path.

Before the Cyclone hit, we contacted our property owners, asking that they confirm that we had the authority to act when dealing with their insurers as well as writing to our tenants to advise them on the best way to contact us for repairs as well as ensuring that they follow Civil Defence for instructions as to what to do.

Most maintenance was done through our Tenancy Concierge service, which we partner with maintenance software partners Tapi. Tapi is an outstanding Wellington-based company that ensures we have a seamless workflow on maintenance requests that we can track and initiate, meaning that maintenance is easy to report and administer. We now even have QR codes on most of our properties that allow tenants to easily upload images of the repair requests, and Tapi’s Artificial Intelligence can even give accurate estimates of the costs of specific repairs.

What could have been done better? Remind property owners to check their insurance and educate tenants on the need for content insurance.

Unfortunately, many tenants no longer bother getting insurance, and this is due to recent law changes limiting the tenant’s liability for accidental or careless damage. Lots of tenants no longer see the need to insure their contents, meaning that many would have lost their possessions post-Cyclone.

This is avoidable as tenant insurance is not expensive, and for many who are adequately insured, it means they can move on quicker with less financial burden. From a property owner's point of view, nearly everyone has some form of insurance on their property.

How many property owners take on a landlord’s extension insurance for loss of rent? The answer is very few.

It's important to look at insurance the same way you look at hiring a property manager, it's not particularly a purchase you want to make, but the day you need it, you are glad that you did.

Similar to what we saw in Christchurch post-earthquake, property owners who had landlord extension cover continued to receive rent, so the impact was minimal. A professional property management company minimizes the risks associated with being a landlord but cannot take on the liability and cost when events such as this occur. Many tenants will see their tenancies end due to their homes being red or yellow stickered.

The property owner will still have a mortgage to pay, and although banks will be supportive, there is a limit as to how long they can provide such support. Now is a timely reminder to investors to assess the current insurance status of their portfolios and ascertain if they are adequately covered.

Need a professional to manage and maximise your property? Talk to our award-winning Property Management team.

Being a landlord is increasingly complex and far more time-consuming than people realise. Throw rent arrears into the mix, and it becomes increasingly emotive. Most of us are time-poor, living busy lives. Here at Property Brokers, our service guarantees mean that landlords receive guaranteed rent, guaranteed tenancy, and guaranteed great service every time. We back our process, and with thousands of properties in our portfolio and more than $150 million of rent collected annually, there are few more experienced at Property Management than Property Brokers. We save you time and money, so you can make the most of yours.