The ultimate guide to accidental damage insurance for landlords - Total Landlord Insurance

April 23, 2024
The ultimate guide to accidental damage insurance for landlords - Total Landlord Insurance

Read an interactive and user-friendly version of this guide below.

Insurers saw a significant rise in accidental damage claims during the pandemic, and the latest figures suggest that this increase may be part of a longer-term trend. Data from the Association of British Insurers (ABI) shows that, despite a smaller increase in the number of claims for accidental damage, the value of accidental damage claims increased by 11% in 2023. This reflects the increased cost per claim for insurers to replace goods, make repairs or provide alternative accommodation. 

The Insurance Times also highlights an increase in accidental damage claims, linked with inflationary and cost of living pressures.  

In this guide, we’ll take a closer look at how you can protect yourself from accidental damage and make sure that you’re covered for these increasing costs. But first, what is accidental damage? 

What is accidental damage?

 ‘Accidental’ means something that is both unforeseen and unintentional and usually occurs suddenly, out of the blue, like a kicked ball smashing through a window. A reasonable interpretation of the word ‘damage’ - as applied by the Financial Services Ombudsman - includes not only physical damage to an item but also something that resulted in a ‘loss of function’. In other words, something that left it unable to perform the task it was designed to do. If tenants cause damage to the building it’s the landlord’s responsibility to pay for the repairs, so it’s worth checking that your landlord insurance policy provides adequate cover.

Insurance providers offer different levels of cover for accidental damage and this could affect the outcome of a potential claim, so it’s important that you understand fully how your insurer defines accidental damage before agreeing to a policy.

How common are accidental damage claims in rental properties?

Around 16% of all Total Landlord’s claims between 2019 and 2024 were for accidental damage, up from 10% in the period between 2018 and 2022. Of these, the majority (58%) were for ‘accidental loss’ scenarios which includes things like the classic example of a ball being kicked through the window, or banging a nail through a water pipe when trying to hang a picture.

One of the most common causes of accidental loss we see at Total Landlord is a tap being left running unattended.

For example, in one case the tenant left the property and came back to discover the ground floor flooded in three inches of water. The tenant had accidentally left the bath taps running and the bathtub had overflowed. As a result, water seeped through the walls and ceilings, affecting the electrics and causing extensive damage to kitchen units below and ground floor ceilings. The bathroom tiles, floorboards and joists also needed replacing, rendering the bathroom unusable and the property uninhabitable. Total Landlord reimbursed the landlord £8,000 for building repairs.

‘Water ingress’ (when water infiltrates a property), accounted for around 21% of all accidental damage claims at Total Landlord between 2019 and 2024, and unfortunately this can be difficult for the landlord to control. For example, in one recent claim, a blocked local authority drain caused dirty water ingress into the insured property, resulting in a hefty claim of £41,316 to cover stripping out the ground floor of the property, sanitisation costs and reinstatement works to the ground floor. 

Fortunately, most claims for accidental damage are much lower than this. However, in line with the national increase in the value of accidental damage claims, the average claim for accidental damage at Total Landlord has more than doubled in recent years. It was £3,312 between 2019 and 2024 compared to £1,520 during the period 2018 - 2022. ‍

What is the difference between accidental damage and malicious damage?

The key difference between ‘accidental damage’ and ‘malicious damage’ is that accidental damage is not a deliberate action. Any damage to a rental property is inconvenient, but while accidental damage is unintentional, malicious damage is caused on purpose with intent to do harm. It includes things like vandalising furniture, kicking holes in the walls and smashing windows.

Neither accidental damage nor malicious damage are usually offered as standard, so it’s important to check whether they are included in your landlord insurance policy and take out extra protection if needed. Our Premier policy provides cover for accidental damage to the building and malicious damage to both the building and contents by tenants or guests.

What is not usually covered by accidental damage insurance?

Accidental damage insurance protects against genuine accidents, but which specific incidents are included will vary from one insurer to another. For example, 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 usually covered by accidental damage insurance, such as:

  • Damage to contents
  • Damage caused by pets
  • Defective design or workmanship
  • Damage to the buildings arising from construction, alteration, repair or lack of maintenance
  • General wear and tear, gradual deterioration, rusting, corrosion, wet and dry rot, rising damp or mould

Who is responsible for accidental damage?

Even if the damage is caused by tenants, it’s down to the landlord to pay for any repairs needed. However, tenants are responsible for reporting any accidental damage to their landlord or agent as soon as they can, so that repairs can be carried out promptly and the situation doesn’t escalate.

Even if your tenants caused accidental damage to your property, it’s your responsibility as the landlord to pay for any repairs. Although the deposit might cover some of the damage at the end of the tenancy, having comprehensive insurance with cover for accidental damage, offers peace of mind that you won’t be out of pocket if you need to make any repairs during the tenancy. It’s a good idea to remind tenants that they are responsible for providing their own contents insurance, as the landlord’s insurance only covers damage to the building itself.

‍Steve Barnes, Head of Broking, Total Landlord 

As well as making sure that you have comprehensive cover, it’s also important to do all you can to reduce the chances of accidental damage happening in the first place.

How can you reduce the risk of accidental damage by your tenants?

Fortunately, there are several things you can do to reduce the potential of accidental damage.

Vet your tenants properly and check their references thoroughly
Make sure that you or your agent has a proper chat with prospective tenants, so that you can get a good idea of what they do and what they are like. You’ll also need to carry out a robust reference check. We recommend a four-point check:

  • Proof of identity from the tenant
  • Utility bill or bank statement
  • Credit check
  • Confirmation of employment

Read our ultimate guide to tenant referencing for more details on carrying out a robust reference check.

Establish a good working relationship with your tenants
Responding to your tenant’s questions or concerns in a timely manner and making sure that repairs are made as soon as possible will keep tenants happy and encourage them to look after your property. Ask 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.

Thoughtful design can help to minimise the risk of accidental damage
Opt for durability when selecting floor coverings, worktops, bathroom suites etc. Don’t be tempted to cut costs but instead choose good quality, durable materials as they will last longer and suffer less wear and tear. It’s also important to have them installed by a reputable tradesperson, as faulty workmanship or defective materials are not included in accidental damage cover.

Make sure that the property is kept in a good state of repair

This will reduce the likelihood of tenants attempting to carry out their own DIY, a common cause of accidental damage. Damage due to lack of maintenance or faulty repair is not covered by accidental damage insurance so it’s important to be aware of landlords’ and tenants’ repair responsibilities

Take extra precautions if your property is in an area that is prone to malicious damage

Choose reinforced windows, place a lock on the garden gate, and fit a prominent security system. Read our ultimate guide to securing your rental property for more useful advice.

Schedule inspections with tenants

Carrying out regular, documented inspections will help you spot problems that crop up during the tenancy, 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.

Accidental damage is, by its very nature, hard to avoid and accidents will of course happen, but landlords can help minimise the risk of accidental damage by taking the steps outlined here. It’s also important 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 four-point 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 for both your tenants’ safety and your own peace of mind.

‍Steve Barnes, Head of Broking, Total Landlord 

What should you do if your rental property suffers from accidental damage?

All being well your tenants should have let you know as soon as possible if there are any issues with the property, so that you can make repairs, rather than attempting to repair the damage themselves or hide it.

The next steps are to:

  • 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 what to do next
  • Engage the services of a professional if necessary

Make sure that you are covered for accidental damage

Unfortunately, no matter how well prepared you are, the unexpected can still happen. Our advice to landlords is to accept that accidents will happen from time to time, so make sure that your insurance covers accidental damage, as this is not usually offered as standard. Total Landlord’s Premier policy includes protection from both accidental and malicious damage caused by tenants, and we have a dedicated in-house claims team of expert advisers who are on hand to help you should the worst happen.

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