Please Note: This Article is 3 years old. This increases the likelihood that some or all of it's content is now outdated.

Landlord Insurance

As a landlord your property is likely to be one of your biggest assets, so protecting it from accidental damage is paramount.  A broken window or overflowing bath could spell disaster for a landlord, not to mention drain their time and money. Reducing the risk of accidental damage in your property with a few simple steps can help to keep your property running smoothly.

Unfortunately, when letting out your property accidents can, and do, happen. Even in the event of property damage that is caused by your tenants, it remains the landlord’s responsibility to pay for, and rectify these issues. With this in mind, it is imperative that landlords purchase a comprehensive landlord insurance policy to cover them in the event of accidental damage to their property and look for ways to minimise accidental damage occurring in the first place.

What is accidental damage?

Accidental damage is property damage caused suddenly by something that is not just unforeseen, but also unintentional. ‘Damage’ is defined, and applied by the Financial Services Ombudsman, as related not only to physical damage but also takes into consideration ‘loss of function’. This relates to part of the property that is now unable to perform its everyday function as a result of this accidental damage.

Examples of accidental damage can include:

  • A ball being unintentionally kicked through a window
  • A nail piercing a water pipe when trying to hang a picture
  • A tap being inadvertently left running
  • Falling through the ceiling when inspecting the loft space in a property

A landlord insurance policy covering accidental damage protects against just that – an accident. Landlords should be sure to check their landlord insurance policy wording to ensure that they are adequately covered for their personal requirements, as specific incidents included under accidental damage cover will vary from one insurer to another.

There are a number of things that are not usually covered by accidental damage insurance, including:

  • Damage caused by pets in the property
  • Damage to contents
  • Damage to the building caused by construction, alteration or repair
  • General property wear and tear
  • Defective design or workmanship

What is malicious property damage?

It is important to establish and understand the difference between accidental and malicious damage to your property. Malicious damage refers to any property damage caused by tenants, or their guests, with intent. It is not to be confused with general wear and tear which is a natural part of letting out a property. 

Examples of malicious damage can include:

  • Windows and doors that have been intentionally broken
  • Smashed furniture
  • Graffiti on the walls or furniture in the property
  • Arson in the property

For malicious damage to be covered by your insurance provider you will need to be able to provide evidence that the damage was caused with intent. In addition, the damage must be reported to the police to obtain a crime reference number. Hamilton Fraser’s Total Landlord Insurance Premier Policy provides cover for malicious damage by tenants and/or guests providing you with support should the worst happen. 

Accidental damage claims report

Recent research conducted by Hamilton Fraser Total Landlord Insurance analysed around 5,000 claims over a 10-year period to assess recurring patterns and statistics surrounding property claims, including accidental damage. This vital information can help to inform and advise landlords on how to best protect their property and particular areas of concern.

For example, Hamilton Fraser found that in 2010 accidental damage accounted for five per cent of all claims received. However, within six years this figure had more than doubled to 11 per cent.

In addition, of note was claim type seasonality whereby it was found that accidental damage peaks in the summer months when people spend more time at home and children are away from school. Food for thought when it comes to looking after your property.

Read the full 10 years of property claims report for more detailed analysis.

How can you reduce the risk of accidental damage in your rental property?

There will always be an element of risk when letting out your property. Despite this you can mitigate the risk of accidental damage in your property by taking certain steps. This includes:

  1. Ensuring you have a comprehensive landlord insurance policy

A comprehensive landlord insurance policy will always be a good line of defence against incurring substantial costs as a result of accidental damage in your property. Remember to check the level of cover provided and that you fully understand how your insurer defines accidental damage before agreeing to a policy, as this is often not offered as standard. Learning this the hard way could be extremely costly, but is easily avoided.

Hamilton Fraser’s Total Landlord Premier Insurance policy includes protection from both accidental and malicious buildings damage caused by tenants, meaning you can rest assured that any accidental damage caused to the building will be taken care of.  This also includes accidental damage to glass and sanitary fittings.

Landlords should also remember that buildings and contents insurance for their property must be based on rebuild or replacement values.

  • Reference check your tenants adequately

Carrying out a comprehensive tenant reference check, such as that provided by Tenant Verify, can help to identify any problem tenants that could increase the risk of property damage.

In addition, understanding more about your tenants can help you to understand what they do day to day and what they are like. For example, a professional couple may have very different needs and requirements from your property compared to a family, which could impact on the type of cover your property requires.

  • Make every effort to establish, and maintain, a good working relationship with your tenants

Responding to your tenant’s queries in a timely fashion and rectifying any property issues as soon as possible can help to reassure tenants that you care about both them and the property. This will likely also encourage them to look after the property, especially if it is a family home. A little kindness can go a long way to ensuring your property is suitably maintained.

It is also a good idea to carry out regular inspections of the property throughout the tenancy to address any concerns with the property before they escalate. This also provides a great opportunity to talk with your tenants about any of their concerns or your recommendations surrounding the property, to ensure that you mitigate the risk of any damage occurring. This also reduces the risk of tenants trying to carry out their own DIY, which could potentially result in accidental damage.

  • Design your property with accidents in mind

Simple changes to your property can help to minimise the risk of accidental damage from the outset. For example, when selecting flooring, worktops and bathroom suites opt for durability to help minimise any damage.

Taking into consideration these factors can help to avoid claims surrounding accidental damage and ensure your property is maintained for many tenants to come. Find out more about comprehensive landlord insurance and rest assured that your property is in safe hands.

Please Note: This Article is 3 years old. This increases the likelihood that some or all of it's content is now outdated.


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