Business Insurance

What Is Accidental Damage In Landlord Insurance?

Accidents in rental properties can and do happen, but did you know there is a type of cover specifically designed to address these situations? Read our comprehensive guide to learn all about Accidental Damage in Landlord Insurance and why it may be worth the investment.

We've all been there—one wrong move and all of sudden you find yourself trying to scrub a large red wine stain out of your cream carpet! Well, small accidents like this can be a headache for tenants and landlords alike, and the costs of rectifying these can quickly add up.

Luckily for landlords there is specialist cover in place that protects them against events such as these, and it is appropriately named accidental damage insurance. Whilst we can all think of examples of accidents in our day-to-day lives, in the context of insurance (more specially landlord insurance) what is and isn't included in this definition is not quite so straight forward!

Luckily, we have put together a handy guide for you which will help clarify the meaning of accidental damage in landlord insurance so you don't get caught out when trying to make a claim.

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What does 'accidental damage' mean?

The definition of accidental damage generally means any damage that occurs suddenly and unintentionally rather than damage or losses that occur over time due to neglect or forgetfulness. Malicious damage by tenants and third parties does not fall within this category, nor does damage or loss as a result of gradual deterioration and general wear and tear.

What does accidental damage mean in landlord insurance?

Accidental damage within the context of landlord insurance will generally cover you against genuine accidents, whether this is caused by you, your tenant(s) or a third party guest.

Some landlord insurance providers may offer protection against all types of accident as standard within their main landlord insurance policy, whilst others may only cover specific events, for example, accidental damage occurring to underground pipes or cables servicing your property and for which you as a landlord are responsible.

Indeed, some will even offer different tiers of accidental damage cover and will give you to option to 'upgrade' to a higher level whilst others may offer accidental damage as an optional add-on entirely!

As you can see, accidental damage cover can vary significantly between providers so it's important to read your landlord insurance policy carefully to ensure you understand if this is included, and if it is, what types of incidents you can claim on. Let's take a look at some common example of accidental damage you'll find are typically covered...

What is covered under accidental damage?

Accidental damage tends to be split according to whether the damage or loss in question applies to your property buildings or landlord contents, and are usually listed separately in your landlord insurance policy wording. Whilst the scenarios that are covered differ between insurance providers there are some generic types of accident that you will find you are typically protected against. For example:

  • Breakage of fixed glass in the property e.g. in doors, fixed cabinets etc
  • Damage to ceramic hobs and ceramic tops of fixed cookers
  • Accidents involving fixed sanitary ware and bathroom fittings
  • Damage to property walls or ceilings
  • Damage to underground service pipes and cables that supply your property and for which you are responsible
  • Damage to fitted carpets
  • Damage to fixed appliances that you as a landlord have supplied to your tenants
  • Damage occurring to furniture you have provided for your tenants (e.g. sofas)

Remember, these are just some examples and the list of inclusions will vary depending on your landlord insurance provider. These will be clearly stated in your policy documentation so be sure to read this carefully so you know what is and isn't covered.

What isn't covered under accidental damage?

Naturally there are some events that many landlord insurance providers won't cover when your take out an accidental damage policy. These are important to bear in mind so you don't waste time making a claim for something that ultimately isn't covered! Whilst this list will again vary by provider, there are some common exclusions we feel you ought to be aware of.

  • Damage occurring as a result of gradual deterioration or general wear and tear
  • Damage caused by pets
  • Malicious damage caused by you, your tenant(s) or guests
  • Items belonging to your tenants
  • Faulty workmanship or defective building materials
  • Water entering your rental property (unless this is caused by specific events included in your policy)
  • Any damage that occurs if your rental property is vacant for longer than the period stated in your policy (usually 30 days but may be longer!)

Again, this list is intended to be used as a guide and is not exhaustive. Whilst the level of cover you receive will differ depending on your specific policy, the one thing all accidental damage policies have in common is that they will provide you with peace of mind knowing you are protected in the case of a sudden accident!

So, how much does accidental damage cover cost? Let's take a look...

How much does accidental cover cost?

20% of buildings insurance policies offer accidental damage as standard.
It's an optional add-on for 79% of policies!

The cost of accidental damage cover will depend on your landlord insurance provider—some may include it as standard within their main policy whilst others will market it as an optional add-on that is available to purchase alongside this.

In fact, a review of 342 landlord insurance policies conducted by independent analysts Defaqto revealed that only 20% of buildings insurance policies include accidental damage cover as standard!

So what is the average cost of accidental cover when purchased alongside a main landlord insurance policy? We compiled quotes for a 1 bedroom flat located outside of London in a mid-sized town with a rebuild value of £200,000.

The price of accidental damage cover varied slightly between insurers where this isn't already included as standard, with the average cost across our sample quotes being an additional £18 per year—thinking about how costly some accidents can be it seems like a small price to pay for that added level of protection!

Cost of accidental damage cover (purchased as add-on)

£ annual

Direct Line

£13

Endsleigh

£15

Aviva

£19

AXA

£24

As we mentioned earlier, some landlord insurance providers include either a basic or full level of accidental damage cover as standard within their main policy such as JustLandlord, CIA, Let Alliance and LV= to name but a few!

Remember, these quotes are intended to be used as a guide and you may find the cost of purchasing accidental damage cover to be more or less than the sample quotes we received above.

What factors can affect the cost of accidental damage cover?

Whilst the cost of accidental damage will firstly depend on your landlord insurance provider, there are a few other factors that are taken into account that can affect your price, too, such as:

  • Claims history: if you have made claims on your landlord insurance in the past insurers will often charge you a higher premium due to the fact they will assume you are more likely to claim again
  • Your excess: this is the amount that you will pay towards a claim. Opting for a higher voluntary excess shows insurers that you are less likely to make multiple small claims (as you would end up paying for these out of pocket!), so will reward you with lower premiums
  • How you pay: you will often find that paying in full upfront, though less appealing, will save you money in the long run. Many insurers will charge interest if you opt to may in monthly installments, and in some case this can be at a rate of 20% or more!
  • The type of tenant: some tenant types are considered to be more or less risky. Those in employment for example are deemed the most desirable type of tenant due to their stable source of income, whilst students are considered more risky due to their reputation for partying! This can ultimately affect the cost of your accidental damage cover — student tenants may result in higher premiums due to the fact accidents are much more likely to occur when alcohol or parties are involved!

Do I really need accidental damage cover?

Whilst accidental cover is not a legal requirement to become a landlord, it is certainly worth considering.

Accidents in the home can and do happen, even with the most reliable tenants! In fact, leading insurance provider AXA states accidental damage claims are one of the most common they receive, whilst financial experts Morgan Clark found that accidental damage was the sixth most common home insurance claim, accounting for 11%!

This highlights the importance of this type of cover. Going without means you will have to pay for any mishaps and repairs out of pocket and these things can quickly add up! So whilst not compulsory, with the average price of accidental damage cover being around £18 per year (based on the sample quotes we received)... it's certainly a small price to pay for an extra security blanket for when things go wrong.

Final thoughts

Becoming a landlord comes with its own set of risks and challenges, which is why ensuring you have appropriate landlord insurance in place is so important so you are prepared for the unexpected. Whilst accidental damage is not included as standard in all landlord insurance policies, as we have seen it is arguably a small additional cost that could save you a lot of money in the long run.

We always recommend thinking carefully about your own individual circumstances when taking out landlord insurance—you may find in the grand scheme of things spending a little extra is a worthwhile investment. Many landlord insurance providers offer a range of optional add-ons available to purchase alongside their main policy for a discounted price compared to if you were to buy the same cover elsewhere, so we certainly recommend checking these out when obtaining a quote.

Optional add-ons extend well beyond accidental damage, and naturally there are many specialist types of cover in place tailored to the risks associated with being a landlord in addition to standard buildings and contents insurance. Here are some common types of cover we recommend considering:

  • Landlord liability: covers the costs if a third party makes a claim against you for suffering sickness, injury or if their property is damaged as a result of your actions or your property
  • Loss of rental income: if your property is damaged rendering your property uninhabitable e.g. due to fire, flood or storm, this will cover the rental income lost for the period of time needed to make your property habitable again
  • Landlord employers liability: if you employ someone, by law you must have employers liability insurance (note: there are some exemptions). This will cover compensation payments and legal costs if an employee suffers a work-related illness
  • Malicious damage and theft by tenants: covers the cost to repair or replace property intentionally damaged or stolen by tenants (e.g. if a tenant purposely breaks a window)
  • Landlord rent guarantee: Unlike loss of rental income, landlord rent guarantee insurance will cover you if a tenant is unable to make rental payments regardless of whether your property is habitable or not (e.g. if the tenant has recently lost their job)
  • Landlord home emergency cover: In the event of an emergency (e.g. boiler breakdown) this will cover the costs of labour and materials needed to fix the issue. You find often have access to a 24/7 emergency helpline as well so you can get advice when you need it most
  • Landlord legal expenses: covers the cost of unexpected legal fees and legal representation needed for things like tenant disputes, recovery of rent arrears, repossession and costs of damage to your rented property

Whilst the thought of paying out more money for additional cover such as those listed above may seem unappealing, when it comes to landlord insurance we always recommend prioritizing the right amount and type of cover for your needs over paying as little as possible.

If you find yourself in a sticky situation that isn't covered by your policy, you may end up regretting paying that little bit extra for the added layer of protection and peace of mind!

Emily Bunt

Emily is a psychology graduate from the University of Kent, currently working as a Data Analyst at NimbleFins focused on insurance content for SMEs. Prior to this she worked in market research at Kantar, investigating consumer behaviour and decision making, as well as in a supporting role in the field of mental health. Learn more at LinkedIn.

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