“It was an accident!� – How can you prepare your property for accidental damage?

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.

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