The complete guide to accidental damage insurance
Accidents can and do happen, even to the most careful of tenants, despite most landlords’ best efforts to carry out regular maintenance and provide a safe home for their tenants. In fact, recent data suggests that accidental damage is actually on the increase as a consequence of the pandemic, which has meant that many more people are now working from home permanently. Here, NRLA insurance partners, Hamilton Fraser Total Landlord Insurance, explain everything landlords need to know about accidental damage - from who is responsible for repairs, to how to reduce your risks and what you should do if your property is affected by accidental damage.
What is accidental damage?
‘Accidental damage’ can be defined as damage that occurs suddenly, as a result of an unintentional act from an unexpected and unforeseen action.
It could be anything from a child kicking a ball through the window, to a tenant leaving the bath tap running or banging a nail into a water pipe. A large proportion of accidental damage claims are caused by tenants leaving taps running unintentionally. The key distinction between ‘accidental damage’ and ‘malicious damage’ is that it is not a deliberate action.
As well as physical damage, accidental damage includes anything that results in a ‘loss of function’, meaning that something has been damaged in such a way that it can no longer perform the task it was designed to do.
Who is responsible for accidental damage?
Even if the damage is caused by tenants, it is the landlord’s responsibility to pay for any repairs needed as a result. So, it is important to make sure that you have comprehensive cover, as well as doing all you can to reduce the chances of accidental damage occurring in the first place.
Tenants are responsible for reporting any accidental damage to their landlord or agent promptly. They are also responsible for providing their own contents insurance – the landlord’s insurance only covers damage to the building itself, so tenants need their own insurance to cover their possessions.
How common is accidental damage?
Accidental damage claims have risen in each of the last three years and so are amongst Hamilton Fraser Total Landlord Insurance’s top three increasing claim types. The average claim amount for accidental damage between January 2015 and July 2021, was for £2,231. But one claim for accidental damage during this period was for a staggering £135,665. Another considerable claim was for £27,694 - a water tank in a loft failed due to age and stress, falling through the ceiling and spilling its entire contents throughout the property. The claim covered the resultant damage, not the replacement of the water tank. The causes of accidental damage are wide ranging and difficult to predict, but these cases emphasise the role of regular and thorough property maintenance in reducing the risks of accidental damage.
What is the difference between accidental damage and malicious damage?
No landlord wants to discover that their rental property has been damaged. But accidents happen, and sadly sometimes tenants cause damage intentionally. Malicious damage is damage that has been caused on purpose with intent to do harm, either by a tenant or their guests. It includes things like smashing windows, kicking holes in the walls or breaking furniture.
It’s important to understand whether the damage is accidental or malicious, and to recognise the difference between the two, so that you can make sure you are covered and don’t have to foot the bill if your property is damaged. Neither accidental damage nor malicious damage are usually offered as standard, so it’s vital to check whether they are included in your landlord insurance policy and take out extra protection if needed. Hamilton Fraser Total Landlord Insurance’s Premier policy provides cover for accidental damage to the building and malicious damage to both the building and contents by tenants or guests.
You can learn more about malicious damage and how to reduce the risks, in our NRLA guide, The complete guide to protecting your property from malicious damage.
What is not usually covered by accidental damage insurance?
Having comprehensive insurance in place offers peace of mind that you are covered if your property is damaged. But it’s also important to realise that while accidental damage insurance protects you against genuine accidents, the specific incidents which are included in the cover will vary between policies. For example, Hamilton Fraser Total Landlord Insurance’s Premier policy won’t cover contents, but it will cover damage to glass and sanitary ware fittings. There are a few things that are not generally covered by accidental damage insurance to be aware of.
These usually include:
- General wear and tear, gradual deterioration, rusting, corrosion, wet and dry rot, rising damp or mould
- Damage to the buildings arising from construction, alteration, repair or lack of maintenance
- Defective design or faulty workmanship
- Damage cause by pets
- Damage to contents
- Damage to outbuildings and garages which are not of standard construction
- Damage to swimming pools, tennis courts, walls, gates, fences hedges, paved terraces, patios, paths and drives
How can you reduce the risk of accidental damage by your tenants?
Having comprehensive accidental damage cover in place means you won’t find yourself out of pocket if your tenants cause damage to your property. However, it’s a good idea to minimise risks and protect your property as much as you possibly can. As we’ve already mentioned, even if the tenant causes the damage, it’s still the landlord’s responsibility to organise repairs. This is a hassle that you can often avoid if you take preventative measures.
There are several things you can do to reduce the potential of accidental damage:
1. Vet your tenants and check their references thoroughly
Build up a detailed profile of your prospective tenant by carrying out robust tenant referencing checks, or make sure that your agent does this on your behalf. This will help give you an idea of their personalities and lifestyle.
2. Establish a good working relationship with your tenants
If you generate a good rapport with your tenants, they are more likely to look after the property and report any damage to you immediately. Encourage them to let you know if any repairs are needed and fix them as soon as possible to maintain the relationship. Advise tenants not to try fixing anything except simple issues themselves.
3. Don’t cut corners when it comes to quality
It can be tempting to cut costs and go for cheap fixtures and fittings in a rental property. But this can be a false economy. Use good quality, durable products and materials for fixtures such as worktops, flooring and sanitaryware as they will last longer and suffer less wear and tear. Always have them installed by a reputable tradesperson, as faulty workmanship or defective materials are not included in accidental damage cover.
4. Keep your property in a good state of repair
A common cause of accidental damage is tenants carrying out their own ‘DIY’. The best way to prevent this, as well as asking them not to, is to make sure that you are on top of property maintenance and attend to any repairs as promptly as possible. Damage due to lack of maintenance or faulty repair is not covered by accidental damage insurance.
5. Schedule inspections with tenants
Carrying out regular, documented inspections will help you spot anything that needs attending to, and also provides an opportunity for your tenant to raise any issues with the property. Periodic inspections are a requirement of landlord insurance policies, so it is important to make sure you do them regularly so that you don’t invalidate any insurance claim.
Steve Barnes, Associate Director at Hamilton Fraser Total Landlord Insurance, says:
“Accidents obviously can’t be prevented entirely, but there are a number of steps you can take to reduce the chances of anything serious happening to either your property or your tenants, and to make sure you don’t invalidate any claim you need to make on your policy. Vetting your tenants thoroughly before letting your property, by carrying out a robust reference check, is key. Develop a good relationship with your tenants once they are in your property, and make sure that they know they should contact you straight away if any repairs are needed. Attend to repairs promptly, and carry out regular inspections and maintenance to ensure your tenants’ safety and your own peace of mind.”
What should you do if accidental damage occurs in your rental property?
Provided you have a good relationship with your tenant and have made it clear that they should let you know as soon as possible if there are any issues with the property, the tenant should report any damage they have caused, rather than attempting to repair or hide it.
You should then:
- Make the property secure and safe to avoid further damage
- Take time-stamped photos if it is safe to do so
- Contact your insurers to notify them of the situation and begin the claim process. They will advise on next steps
- Engage the services of a professional if necessary
Steve Barnes sums up:
“Even if your tenants are responsible for the accidental damage to your property, it will fall to you as the landlord to pay for any repairs. Your deposit might cover some of the damage at the end of the tenancy, but having comprehensive insurance in place, which incudes accidental damage cover, offers peace of mind that you won’t be out of pocket if you need to make any repairs during the tenancy. Accidents do happen, but as long as the property is adequately insured, our Premier policy will cover any damage to the buildings that has been caused.”
Unfortunately, no matter how well prepared you are, the unexpected can still happen, which is why we recommend that you have the right insurance in place to provide comprehensive cover. NRLA landlord insurance partner, Hamilton Fraser Total Landlord Insurance, has a dedicated in-house claims team of expert advisers who are on hand to help you should the worst happen.
