It’s a sad fact, but malicious damage is on the increase with claims rising by more than a third between 2015 and 2020. Latest figures also show the average claim now exceeds £5,500. With that in mind, it’s important to know that your landlord insurance has you covered – here’s what to consider.
We’ve broken the article down into the following sections so you can quickly find the information you need:
- What is malicious damage and what is accidental damage?
- What insurance covers malicious damage?
- Who pays for the damage in a rental property?
- Malicious damage insurance for businesses
- Eviting a tenant and proving malicious damage
- Making a claim
- Finding the right malicious damage cover
Malicious damage is damage done on purpose. Fundamentally, it’s a type of vandalism where the person doing the damage wants to cause destruction and harm.
What is accidental damage?
Accidental damage is unintentional, as is wear and tear which happens naturally through age or use. Both are very different to malicious damage. Examples of each include:
- A DIY mistake that leads to a hole in a wall is accidental damage.
- A door that’s been kicked in to cause harm is malicious damage.
- A worn carpet or scuff marks on walls is wear and tear.
Most landlord insurance policies will cover malicious damage as part of your buildings or contents cover if it’s caused by burglars breaking in or vandalising your property. But some policies will stop there and won’t cover you for damage done by tenants (or their guests). If this is the case and damage by tenants isn’t included, you should be able to add it to your policy as an optional extra.
On the other hand, some policies will pay for malicious damage caused by anyone with a legal right to be on or in your property (like tenants and their visitors). For instance, landlords covered by Alan Boswell can rest assured that malicious damage by tenants is a standard feature in our policies.
Your policy documents should clearly set out what’s covered, along with any other specific terms. This includes any claim criteria – for example, some insurers will only proceed with your claim if tenants passed their initial reference checks.
As a landlord, it’s ultimately up to you to cover the cost of repairs. If you don’t have insurance, that means footing the bill yourself.
However, you can make a claim for damages and deduct it from your tenant’s deposit which they’ll need to agree to. If they don’t, you’ll have to open a case with the tenancy deposit scheme holding your tenant’s deposit. You’ll also need evidence of damage along with any receipts that show the cost of repairs. The decision made by the scheme’s adjudicator is final so you won’t be able to appeal and you won’t be able to pursue them for any more costs if they rule against you.
If your tenant’s deposit doesn’t cover the damage, you can take them to the small claims court which you can do online at GOV.UK.
Remember that malicious damage is classed as vandalism in the eyes of the law and tenants can be prosecuted. Tenants that are found guilty could face a £2,500 fine if the damage they cause is less than £5,000. Tenants can also face up to three months in prison.
If tenants cause significant damage costing more than £5,000, the fine can rise up to £5,000 and lead to imprisonment for up to six months.
If you’re a landlord with commercial property, you should check the terms of your policy to ensure the cover is sufficient. Cover such as Malicious Damage, for example, is often an optional extra you need to select. If in doubt, always speak to your insurer so you can find a policy that meets all your needs.
How do you prove malicious damage?
To prove malicious damage, you’ll need to show that the intent was to cause harm. The simplest way to do that, is to report the damage to the police who will give you a crime reference number.
You should also take date-stamped photos of any damage. Ideally, you should have an inventory with ‘before’ pictures for comparison.
What to do if a tenant has damaged your property on purpose?
Part of this will depend on when you discover the damage. If your tenancy has come to an end, deducting costs from their deposit or taking them to the small claims court might be the best course of action.
If the damage has been done partway through the tenancy, you could start the eviction process.
If the tenant has already left your property, you should make sure it’s secured so that no-one else can gain entry.
Whatever you decide to do, it’s important to make sure you have evidence which includes photos and a crime reference number.
Despite the rise in cases, malicious damage is not an inevitable part of renting your property and risks can be mitigated or avoided with a few simple precautions, such as:
- Reference checks – this can include credit and guarantor checks as well as a full record of their rental history.
- Requesting a reasonable deposit – most deposits equate to four or five weeks’ worth of rent which can be a significant amount of money. Tenants are less likely to risk getting that money back by causing malicious damage. Don’t forget that all deposits need to be secured in a government approved scheme.
- Making a detailed inventory – a comprehensive report can help prove instances of malicious damage so it’s in your interest to provide one.
- Carrying out property inspections – regular inspections can highlight issues early on and is also good way to keep maintenance in hand.
- Nurturing a good relationship with tenants – this just means making sure tenants can expect you to fulfil your landlord responsibilities and resolve any problems quickly.
- Investing in security – precautions like external CCTV, motion sensor lighting and secure fences and gates can help deter opportunistic thieves or vandals and lower the risk of damage being done.
Your policy documents should set out any processes for making a claim.
Depending on the nature or extent of the damage, your insurer may send someone out to assess your property once you have a crime reference number. If that’s the case, don’t be tempted to tidy up or throw anything away. Leave everything as it is until your insurer tells you otherwise.
Similarly, if you need to carry out repairs for malicious damage, don’t rush in. Some insurers will have a list of preferred tradespeople so check with them first. Using someone else could invalidate your claim.
Will malicious damage cover get my property back to its original state?
Your policy should cover the cost of damage but there may be limits depending on the terms and conditions set out by your insurer. For example, contents may only be covered up to a certain value and may not provide you with a like for like replacement.
You’ll also need to consider the excess on your policy which is the amount you pay towards a claim.
Being a landlord can be stressful, even without the worry of having to deal with malicious damage – either by tenants or through attempted burglary. But having a landlord insurance policy you can rely on can mitigate the worry and stress of dealing with the unexpected.
At Alan Boswell, not only do we provide award-winning service, we understand that landlords have different needs and we’ll tailor a policy to suit you. To get an idea on the support and cover we provide, take a look at our landlord hub, where you can also access news and advice. Alternatively, you can speak to an expert directly by calling the team on 01603 216399.