What does landlord insurance pay for lost rent and tenant damage in New Zealand?
General information, not advice on your situation. Buying through Tower's online quote is direct, without advice. QuoteHub is a Tower partner and Smiths Insurance & KiwiSaver may receive a commission from Tower.
Landlord insurance does not replace rent whenever a tenant stops paying. In Tower's Landlord's Plus wording it pays up to eight months' rent if the house is uninhabitable after an insured event, and only eight weeks' rent for a short list of tenant-related causes (Tower). Tenant damage is shared between the law and the policy: under the Residential Tenancies Act a tenant's liability for careless damage is capped at four weeks' rent or your insurance excess, whichever is lower (Tenancy Services). This guide, part of QuoteHub's landlord insurance series, shows how the two fit together and where claims go wrong.
When does landlord insurance pay lost rent?
Read the trigger before the limit. Tower's wording has two separate lost-rent benefits, and the first is the larger one (Tower policy wording). The table below shows what each event gets under that wording.
| Event | What Tower's Landlord's Plus wording pays | Maximum period |
|---|---|---|
| House uninhabitable after an insured event | Rent lost while repairs are done, only if tenanted at the time | 8 months (wording) |
| Tenant lawfully evicted for not paying rent | Rent lost, less advance rent, bond and a one-week rent excess | 8 weeks (wording) |
| Tenant leaves without the required notice | Rent lost, same deductions | 8 weeks (wording) |
| Tenant lawfully stops paying because of blocked access or failed utilities | Rent lost, same deductions | 8 weeks (wording) |
| House uninhabitable because of insured deliberate damage by tenants | Rent lost, same deductions | 8 weeks (wording) |
| Tenant is a slow or partial payer, or the house sits empty between tenants | Not listed as a trigger | Not applicable |
The last row catches many landlords. Arrears alone do not trigger a benefit. Eviction for non-payment does, and only after you have followed the arrears steps in the wording, set out further down.
How the two benefits work
Loss of rent for damage to your house pays rent you lose because the house is uninhabitable after a claim Tower accepts, or a claim covered under the Natural Hazards Commission's cover. The house must be tenanted when the loss happens, and payments stop once repairs are finished or your claim has been paid (Tower policy wording). "Uninhabitable" is a defined term: no working bathroom or kitchen, or unsafe or impractical to live in, as decided by Tower or the authorities. A damaged house that is still livable by that definition may not meet it, so ask Tower before assuming.
Loss of rent for other reasons is narrower. Before paying, Tower deducts any rent paid in advance, any bond held by Tenancy Services, and an additional excess of one week's rent (Tower policy wording). Neither benefit applies where the house is uninhabitable because of contamination damage. Meth has its own benefit and conditions, covered in our guide to meth contamination and landlord insurance.
Two short examples show the difference. A kitchen fire during a tenancy makes the house unlivable for repairs: the first benefit is the one that responds, for up to eight months while the house is being fixed. A tenant who simply moves out without giving notice leaves you with the second benefit only, with the bond and any rent in advance taken off first. If you have a gap between tenants because you could not find one, nothing in the wording treats that as a loss.
What happens when a tenant stops paying
The eight-week benefit is tied to a sequence of steps in the wording. Tower can decline a claim and recover money already paid if you have not followed them (Tower policy wording).
| Stage | What the wording asks of you |
|---|---|
| Before the tenancy | Satisfactory references for every adult living in the house, a signed tenancy agreement, a written pre-tenancy inspection, and at least one week's rent in advance plus at least three weeks' bond, or any mix totalling four weeks' rent (wording) |
| During the tenancy | Inspect inside and out at least once every three months, with written notes and photos of new damage (wording) |
| Rent 14 days in arrears | Send the tenant written notice and visit the house to see whether they still live there (wording) |
| Rent 28 days in arrears | Apply to the Tenancy Tribunal for vacant possession (wording) |
Dates matter in the last two rows. A landlord who waits months before applying has not followed the wording, which puts the eviction-related rent benefit at risk. Keep dated copies of every notice, inspection report and reference check, because the wording says Tower can ask for the reference and pre-tenancy records. The tenancy process itself is set by the Residential Tenancies Act, so confirm the steps with Tenancy Services or the Tribunal rather than relying on an insurance wording.
Tenant damage: who pays under the law
Tenancy Services sets the starting point, and it applies whether or not you are insured (Tenancy Services).
| Type of damage | Who is responsible | Limit |
|---|---|---|
| Burglary, natural events such as storms, floods and earthquakes, fair wear and tear | Not the tenant | Not applicable |
| Careless damage by the tenant or their guests | The tenant | Four weeks' rent or your insurance excess, whichever is lower (Tenancy Services) |
| Intentional damage by the tenant or their guests | The tenant | Repair, or the cost of repair or replacement (Tenancy Services) |
Three NZ details are easy to miss. Landlords cannot ask for or accept more than the careless-damage limit, and insurance companies cannot chase tenants on your behalf for it. Tenants on income-related rents are liable up to four weeks' market rent or the excess, whichever is lower. And if the two of you cannot agree, either side can apply to the Tenancy Tribunal, which can order repair or compensation taking depreciation into account. If the damage is substantial, you can apply directly without first serving a 14-day notice to remedy (Tenancy Services).
The burden of proof sits with you first. You must show the damage is not fair wear and tear, and then the tenant must show it was careless rather than intentional, or neither. If it was neither careless nor intentional, the tenant is not liable. Burn marks and drink stains on carpet are examples of damage that is not normally fair wear and tear, while worn flooring and leaking tap washers are examples that are.
Because of this cap, the excess you choose has a direct effect on what a tenant can be asked to contribute. You must also state in each new tenancy agreement whether the property is insured and the excess on any relevant policy (Tenancy Services).
Tenant damage: what the policy adds
Tower's wording covers "loss" to the house, defined as sudden and accidental physical loss or damage. On top of that, Landlord's Plus pays for deliberate damage caused by tenants or their guests, up to $20,000 for each event, with an additional $500 excess for each event (Tower policy wording). That benefit does not apply where the meth decontamination benefit applies.
Two exclusions catch many landlords out. Damage by a tenant's pets, such as scratching, clawing, chewing or urine, is excluded, and so is general wear and tear. Tower also says its landlord cover does not pay for a tenant's belongings, which is why tenants need their own contents cover (Tower). Tenancy Services makes the same point and encourages tenants to insure their belongings and consider personal liability cover. Our guide to renters insurance covers that side.
Wordings differ between insurers, so check how yours treats accidental damage by tenants. Tenancy Services notes that policies can cover things like vacancy periods or tenant damage, and that some insurers need landlords to prove thorough tenant checks were done (Tenancy Services).
Vacancy, and other gaps worth knowing
"Unoccupied" in Tower's wording means no-one stays in the house overnight. If that lasts more than 90 consecutive days, cover is limited from day 91 and an additional $1,000 excess applies to a claim for loss to the house, unless your certificate of insurance shows the house as a holiday home. The wording also asks you to call Tower if the house will be unoccupied for more than 90 days (Tower policy wording). A long gap between tenants is a good moment to ring your insurer. Our guide to landlord insurance versus house insurance explains why the policy type matters, and if you let short stays, see short-term rental insurance.
Natural hazard events sit alongside all this. Lost rent after an earthquake or flood depends on the claim being accepted by Tower or covered under the Natural Hazards Commission's cover (Tower policy wording). See our guides to natural hazards and flood cover and natural disaster insurance in NZ. How a claim runs is covered in Tower insurance claims, and the full product is summarised in Tower landlord insurance.
Getting a quote from Tower online
Have the property address, build year, construction type, floor area and the sum insured you are aiming for to hand, and know whether the house is currently tenanted. QuoteHub's link opens Tower's own online quote. Other insurers sell landlord cover too, so the benefits and limits are worth comparing whichever way you go. The link is here: Tower's online quote.
Questions people ask
Does landlord insurance cover unpaid rent?
Only in listed situations. Tower's wording pays up to eight weeks' rent if a tenant is lawfully evicted for not paying, leaves without the required notice, or lawfully stops paying because of blocked access or failed utilities (Tower). It deducts advance rent, the bond and a one-week excess first (Tower policy wording). Ordinary arrears that you are still chasing are not a trigger.
Does landlord insurance cover tenant damage?
It can. Tower pays for deliberate damage by tenants or their guests up to $20,000 for each event, with an extra $500 excess (Tower policy wording). Pet damage and wear and tear are excluded. Other policies word this differently, so check the exact trigger.
How much can I recover from a tenant for damage?
For careless damage, no more than four weeks' rent or your insurance excess, whichever is lower (Tenancy Services). For intentional damage, you can ask the tenant to repair it or pay the cost of repair or replacement. If you cannot agree, either side can apply to the Tenancy Tribunal.
Is lost rent covered if my rental floods or burns?
Under Tower's wording, yes while it is uninhabitable, if the house was tenanted at the time and the claim is accepted or is covered by the Natural Hazards Commission, with a maximum of eight months (Tower policy wording). Payments stop when repairs are finished or the claim is paid.
Does landlord insurance cover my tenant's belongings?
No. Tenancy Services says a landlord's property insurance does not cover a tenant's belongings, and tenants may be liable for damage caused by them or their guests, so it recommends contents and personal liability cover (Tenancy Services).
Adviser's view
QuoteHub's read: rent and damage cover pays only for the events a wording lists, so the tenancy conditions you must keep, such as reference checks and regular inspections, matter as much as the limit.
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QuoteHub is a Tower partner. If you buy through this link, Smiths Insurance & KiwiSaver may receive a commission from Tower. Buying online is not financial advice.
Cite this page QuoteHub NZ (2026). Loss of Rent and Tenant Damage Cover in NZ. www.quotehub.co.nz/landlord-insurance/loss-of-rent-and-tenant-damage. Updated 2026-10-07.
References
- Tower, Landlord insurance
- Tower, Landlord's Plus policy wording 09-24
- Tenancy Services, Damage and repairs
- Tenancy Services, Insurance
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