Landlord insurance does cover malicious damage, but not in all circumstances. Both building insurance and contents insurance—if purchased—typically cover malicious damage by people not lawfully allowed in the property as standard.
But when it comes to malicious damage by tenants things get a little more complicated and is not always offered by insurance providers. If malicious damage by tenants is offered by an insurer, an extra premium is frequently required to get this coverage.
Malicious damage is that which was caused with intent and differs to accidental damage as that was not done on purpose. In the eyes of insurers, malicious damage comes in two forms:
- Damage caused by someone not legally allowed in the property, for example a burglar or vandal.
- Damage caused by a tenant, their family or anyone else lawfully on the premises such as the landlord’s employee.
All landlord insurance policies include building insurance, meaning a property owner would be covered for the repair or replacement of fixtures and fittings on the house both internally and externally, should they become damaged. Not all insurance policies are the same, but most do cover the following disasters: Fire Flood Lightning Storm Earthquake Explosion Malicious damage Escape of water Civil commotion Riot Robbery Theft
Building insurance covers the cost of repairs to anything permanently attached to the property. This includes guttering and pipes, external walls, fences and gates, driveways, doors, windows, but also many items inside the home. Fitted furniture such as kitchen cabinets, bathrooms and laminate flooring is also classed as an item under building insurance. The Financial Ombudsman explains items fall under building insurance and not contents when they cannot reasonably be moved to another property without damage. For example a carpet could be moved to another house, but laminate flooring could not.
Contents insurance, however, does not come as standard on landlord insurance policies. This is usually an add-on and covers the repair or replacement of items the landlord owns inside the rental property. It does not cover the tenants’ own belongings. Contents insurance should cover malicious damage by people unlawfully in the property.
Does landlord insurance cover tenant damage?
Landlord insurance does not automatically cover tenant damage and it depends on the scenario in which the damage was caused.
Accidental damage can be purchased as an add-on to a policy and can cover unexpected harm to either the building or contents, or both. In this instance, if the tenant broke something by accident, for example a window was smashed or red wine was spilt on a carpet, the insurance would cover the cost to replace or repair the items.
When it comes to malicious damage by tenants, insurers are less likely to cover this. It would not be included as standard on a policy, but some providers do sell malicious damage by tenants cover as add-ons. Some do not offer it at all, while some have conditions such as not offering it to properties rented to students.
Can you charge a tenant for damages?
The most common way for a landlord to charge a tenant for damage is to take it from their deposit. In the UK it is the law that a tenant’s deposit is held in a registered tenancy deposit protection scheme which is arbitrated by an independent moderator. Claims on the deposit must be agreed by the tenant and if there is a dispute the independent adjudicator makes the final decision. It cannot go to court.
Sometimes landlords may have to pay more than their charged deposit to put right the damage to the property. Landlords can take matters to a small claims court but these can be lengthy and costly.
A tenant is responsible for the cost of repairing damage to neighbouring properties if their negligence caused harm.
Some damage in a property is nothing more than wear and tear and cannot be claimed through the tenant's deposit. Wear and tear happens in all homes, and often happens more frequently in a rented home. Reasonable wear and tear includes worn carpets, marks on walls, faded curtains and marked shower screens.
However, damage is classed as such if it is down to neglect and carelessness. Examples of damage is red wine stains on a carpet, a cracked window pain, straightener burns on a carpet or furniture, or cigarette burns.
Does Direct Line landlord insurance cover malicious damage?
Direct Line landlord insurance covers some forms of malicious damage. It covers malicious damage due to burglary or vandalism, but does not cover malicious damage by tenants as standard.
There are a number of other exclusions in Direct Line’s malicious damage terms and conditions:
- If the malicious damage was caused by theft.
- If the property was vacant.
- If the property is in the open.
- If the property was not locked.
- If the damage was caused by vandals acting in connection with a political organisation.
- The damage was caused due to the cessation of work.
- If the damage was caused by the tenant, employee or criminal.
- If the damage was due to confiscation, requisition or destruction by order of the government or public authority.
Malicious damage by tenants is available to buy from Direct Line as an added extra, covering damage by the tenant, their family, or anyone else lawfully on the premises. Direct Line will honour claims up to the limit set for buildings or contents insurance depending on what is damaged. However, a £500 excess must be paid. Landlords of properties let to students can not apply.