Insurance may be something you seldom think of as a tenant. 

After all, it’s the landlord’s responsibility to insure their property with rental and house insurance, right?

That’s true, but you could find yourself on the wrong side of a nasty court battle if you don’t take precautions with a standard contents insurance policy.

There has been a lot of media attention over the past 18-months about the Osaki case, in which AMI Insurance took tenants Kenji and Tieko Osaki to court to sue for damages to the rental home they lived in. Mrs Osaki had left a pot of oil on high heat unattended for five minutes, and the resulting fire burned the house down. The landlord was insured, but their insurance company pursued the Osakis personally for the full cost of the rebuild. 

In the end, the Court of Appeal ruled in the Osaki’s favour. However, the ruling had seemingly unintentional consequences: the Tenancy Tribunal has made a subsequent series of rulings in which tenants have escaped responsibility for ANY damage to properties if it can’t be proven that it was accidental. Landlords have fought back, advocating for changes to the Residential Tenancies Act so that they are better protected in case of damage. 

In some occurrences, District Courts have overruled Tenancy Tribunal decisions about accidental damage in favour of the landlord. So there’s still a bit of confusion about accidental damage, and it’s better to be safe than sorry until it’s clarified by central government in the Residential Tenancies Act.

A simple contents insurance plan may cost you just a few hundred dollars a year for $10,000 cover. But it doesn’t just cover your contents: Most New Zealand content policies have at least a $1 million legal liability cover for claims against the tenants by third parties. 

For a few dollars a week, that’s a lot of peace of mind.

Advice for tenants

• - Take out contents insurance.
• - This should automatically cover not just your possessions but also the house you rent.
• - If you burn that place down unintentionally, you're likely to be covered.
• - Without it, you can be sued for the full rebuild costs.
• - Be careful who you invite around: you're responsible for guests and their actions too.