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Malicious Damage – What does it cover?

Malicious damage is not in all landlords insurance policies. You will find that some landlord insurance covers the damage by tenants. They may not cover the 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 for most insurers is damage caused by somebody on purpose. Some insurers will include malicious damage by tenants and some won’t. You will need to check the wording of your policy and what excess applies. It covers the cost of repairing intentional damages.
 
If the property is a flat you might find that the freeholder has the responsibility to deal with the landlord buildings insurance. If that is the case they will then be responsible for any damage that takes place at the property. It is important for landlords to realize that damage does not cover the 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 damage. As it will affect the policy depending on who caused the damage. Examples 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 someone falling through the ceiling in the attic. Deliberate property damage is every landlord’s worst nightmare. The repairs or replacement of the broken items such as furniture and fittings could run into the hundreds or thousands.

How do I know the difference between accidental and malicious damage?

 

Accidents do happen and it would be fair to assume that every property will become damaged at some point. When it does – how will you know if the damage is accidental or malicious?

 

Unexpected or sudden damage such as tenants spilling a glass of wine on the carpet would fall under accidental damage. But, incidents happening through anger or spite are malicious. For example, fixtures and fittings being ripped out or removed. Extreme cases of malicious damage may warrant reporting to the police. Any claim would be subject to meeting the terms and conditions of your policy.

 

My tenants have left and destroyed my property – what should I do?

 

All incidents of malicious damage should be reported to the police. Providing you with a crime reference number. You will need this for your insurance company before you do anything else. The next step would be to report the incident to your Insurance Company or broker who will tell you what to do next. Take photographs as soon as possible to document the damage and make sure that they are date stamped.

 

The insurance provider will likely assign a loss adjuster from an independent claims specialist. This frequently occurs in cases of malicious damage. The insurer may ask you to find quotations for the repair work and replacing any lost items. Any works which need to be undertaken to ensure the safety and security of the premises should be carried out immediately. It is important that you provide your Insurance company with as much information as is possible.

 

Reduce the risk of housing nightmare tenants

 

Before any tenancy agreement, it would be wise to consider what you need from your tenants and your letting agent. Whilst it may be satisfactory to get references it is now illegal to give any one person a bad reference. It would thus be much more important to get some form of guarantor for your tenants to ensure that you always have somebody to speak to. If there is a problem and/or revert back to and be responsible for in the event that there is an issue. This is becoming more standard across the letting industry. Most tenants are able to provide this.

 

You should not allow the tenant to occupy until the first month’s rent deposit payment has cleared into your or your managing agents’ bank account.

 

Once the tenant is in situ you or the managing agent should carry out internal and external inspections to the building. These should be at least every three months or as printed on the tenancy agreement. It’s important to keep records of the inspections and retain the documents for at least two to three years.

 

Every insurance company is different. It is important to be aware of your responsibility as a landlord by checking the terms and conditions of the policy carefully. Failure to do so may result in a claim rejection, leaving you to pick up the bill. Speak to us about any information you may need on this.

Summary

 
We would suggest that this is an absolute must for a landlord to have. Not only is malicious damage important but also landlords contents insurance. There have been occasions where tenants have left the property trashed and had rental 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 have the right cover to not lose out. There are always additional extras so if you would like to discuss your cover with us request a call back.
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