Landlords with a Property Owners policy may be surprised to learn how few insurance companies include malicious damage by tenants cover as standard and, of those that do, many provide only a small limit of £5,000 to £7,000. Whilst policies often show ‘malicious damage’ as an insured peril, this is usually in respect of persons not lawfully allowed in the property, which by definition would exclude damage caused by tenants and their guests. It is, therefore, important to check that damage caused by tenants is included.
Where cover for malicious damage by tenants is included, there are typically a number of conditions imposed by the insurer in order to mitigate such risks. These can include:
– Carrying out a thorough reference check – such as photo ID, utility bill/bank statement, credit checks and employment referencing, before entering into a tenancy agreement.
– Robust inventory checks both pre and post tenancy – including listing all items, their area in the property and their condition. Photo or video evidence, timed and dated, should be obtained. Specialist inventory firms are available to undertake this.
– Carrying out routine inspections –regular, often 3 monthly, internal and external inspections should be undertaken, with records kept.
Other general suggestions can extend to:
– Creating a good working relationship with tenants – including providing clear and direct lines of contact, communicating clearly, understanding tenants’ needs, being reliable and dealing with issues promptly.
– Security deposit – a deposit offers some protection if the property is damaged. There is a legal requirement to protect the deposit in one of the government’s authorised schemes.
– Carrying out regular maintenance and making sure the property is secure – a neat and tidy property which is secure and maintained is more likely to be treated with respect by tenants and their guests.
The accidental omission of malicious damage by tenants cover can be financially devastating. At Daines Kapp Insurance Brokers we always highlight the level of cover your policy includes so you can make an informed decision when protecting your assets.
If you would like us to check your existing policy terms or provide a quote, please contact us on [email protected] or 01920 484844.
