Malicious Damage Insurance

Malicious damage is not in all landlords insurance policies. You will find that some insurance policies will cover malicious damage by tenants. They may not cover damage by a third party or vice versa. Our Aviva insurance policy will cover both damages by the tenant and by a third party.

What is malicious damage insurance?

Malicious damage insurance doesn’t usually exist as a cover on its own right. The definition of malicious damage for most insurers is damage caused by somebody on purpose. Some insurers will include damage made by tenants and some won’t. You will need to check the wording of your policy and what excess applies. The malicious damage cover will pay for the cost of repairing intentional damages.

But what counts as malicious damage? The definition of malicious damage for most insurers is damage caused by someone who is not legally allowed to occupy the premises. Yet, some insurers define malicious damage differently so you will need to check the exact wording of your policy and what is covered. You may find for instance that it is not your property that’s covered it may also be your computers. If you supply this type of equipment to your tenants then they may have malicious software which is covered by your policy. It is unusual but it does happen.

If the property is a flat you might find that the freeholder has the responsibility to deal with the building insurance. If that is the case they will then be responsible for any malicious damage that takes place at the property. It is important for landlords to realise that malicious damage does not cover tenant’s possessions. It is always a good idea for tenants to take out their own insurance for their belongings.

Malicious damage for a commercial property includes damage by vandals or disgruntled customers. It is important to be able to show what and who caused the malicious damage. As it will affect the policy depending on who caused the damage. Examples of malicious damage include smashed windows, doors or frames. Arson and graffiti on the walls or furniture. This does not mean that it includes accidental damage. Accidents can happen.

Accidental damage is unintentional. It usually occurs suddenly and includes physical damage and/or loss of function. Examples could be a ball kicked through a window or even someone falling through the ceiling in the attic. It is every landlord’s nightmare that the rented property is deliberately trashed. The repairs or replacement of the broken items such as furniture and fittings could run into the hundreds or thousands.

What are the common types of malicious damage? This could be anything but examples are

• Smashing of windows on purpose
• Graffiti
• Damage to door hinges
• Destroying furniture known as the property of the landlord
• Large damage to indoor surfaces such as holes in walls or ceilings
• Theft of the landlord’s property i.e. the rental property is furnished
• Computing systems if you supply these

It is always best practice to try and check the conditions of your landlord policies. To see whether accidental malicious damage is covered as many policies don’t cover it. If you are unsure on your current policy then it is best to talk to us and we will see whether it is covered for you.

Will my legal expenses, computer systems and business insurance be covered by malicious damage?

These types of cover will also include malicious software. A malicious code that takes over your computer which might not be under your landlords’ insurance. They are done by way of business insurance and you should contact us in this regard.

What to do in the case of malicious damage to property?

If you have noticed sizeable malicious damage during a routine inspection. There are various options that you can consider before you go any further.

The best is to take photographic evidence of damage. To help ensure there is a record in case you need to use legal services and action is required later.

You would need to speak to your tenant and do a written formal demand. As it is a breach of the tenancy agreement, and send details of the damage that you need repairing to the tenant. You would need to send some form of quotes, at least two to give them details of what you need dealt with. Give a set period in which to deal with the damage. You should always give the tenant an opportunity to try and mend any damage without the landlord needing to involve third parties. This is a good business practice by a landlord.

If it becomes a disagreement on whose responsibilities the repairs are and the tenant is refusing to repair any damage. Then further legal action may needed. It is thus important that your policy includes legal services to help you in this regard. This will include involving the local police as you will need to get a crime number to make a claim. Did you know that malicious damage can carry hefty fines and in some cases can involve imprisonment for the people that have carried them out? You should thus not take this lightly and make sure you use your best efforts to contact the tenant to see if they will resolve the issue first.

How to avoid malicious damage to property:-

Screening of tenants – screening of tenants should always be considered. But, nowadays as no one can give a bad reference you need to consider something stronger such as rental insurance or getting a guarantor. You will often find that most letting agents now insist on guarantors when it comes to tenants taking any properties.

Regular rental inspections

Property inspections allow you to make sure that not only do you keep an eye on the tenants but also the wear and tear of the property. You should thus be able to schedule in regular maintenance. To ensure that your property is being kept to the best possible standard. So if the tenant gives notice you could always re-let it quickly.

Get insured properly

We often find with a lot of landlords that they reduce their cover to reduce the price but when they want to then make a claim it is not included. This can be critical to landlords who need to consider whether you wish to reduce your cover or not in future. Saving £20 or £30 could cost you thousands in future.

Summary

We would suggest that this is an absolute must for a landlord to have. Not only is malicious damage important but also landlord’s contents insurance. There have been occasions where tenants have left the property trashed and been in rent arrears. Request a call from us to discuss rent guarantee insurance further. It is always an emotional time when tenants trash a property but it does happen. Landlords need to know that you are going to be covered and not lose out. There are always additional extras so if you would like to discuss your cover with us request a call back.