Tenant damage – a matter of motive

When it comes to tenant damage in landlord insurance policies, insurers generally consider there to be three types – accidental, malicious and deliberate/intentional. These types are based on the intention – or cause – behind the damage. Why does this matter to you? Because not all insurers cover all three types of tenant damage. In fact, most providers will exclude one or more of these or only provide cover as an optional extra.

It pays to understand the different types of tenant damage, so that you can choose an insurance product that best addresses the risks you want to protect against.

Accidental

Accidental tenant damage is damage that has resulted from an unforeseeable or unintentional event. It wasn’t caused on purpose, but by accident. It is sudden and unexpected, say for example:

• stained carpet resulting from something being spilled on it,
• a scorched laminate bench after a hot pot is mistakenly placed on it, or
• tiles cracked when a heavy object is dropped on them. 

EBM RentCover offers up to $70,000 in accidental tenant damage to fixed contents and the building. While it is a standard inclusion in our RentCover Ultra and Platinum policies, this is not the case for all landlord insurance providers. Despite the fact that accidents can and do happen, a number of providers don’t offer the cover as standard and may only offer it as an optional extra or exclude it entirely.

Malicious

Malicious tenant damage is the one most likely to cause confusion for landlords. Often a landlord will think the damage caused by tenants was malicious when it was actually deliberate (there is an important difference, so read on). To be considered malicious, there has to have been malicious intent behind the damage. It needs to be carried out with vindictiveness or spite. The tenant must have been motivated by malice and intending to cause damage, for example:

• punching and kicking doors and walls,
• smashing windows,
• removing securing doors,
• destroying locks,
• graffiti,
• ripping out fittings and fixtures, or
• damaging/sabotaging services.

EBM RentCover offers up to $70,000 to cover malicious tenant damage to fixed contents and the building in its RentCover Ultra and Platinum policies. Although malicious damage claims occur more frequently than you might imagine, the cover is often not offered by other landlord insurance providers. Some may exclude the protection altogether or only offer cover if the damage was perpetrated by a third party – as the result of burglary or act of vandalism, for example, and not if caused by the tenant or another person legally on the premises.

Note: Wilfully damaging or destroying another person’s property is criminal damage and must be reported to the police. Usually, a copy of the police report will be needed to make a claim for malicious tenant damage.

Deliberate/intentional

When a tenant damages or alters the state of the property on purpose, but without malicious intent, it is usually considered to be deliberate. The tenant may be looking to personalise or improve the property to suit their needs which is the motivation for making the changes, they aren’t setting out to cause damage. Common examples are where tenants:

• put holes in walls to hang pictures,
• put up shelving,
• remove blinds or other window coverings,
• repaint,
• take up carpet or flooring,
• install child safety locks and devices,
• perform DIY renovations, or
• re-do the garden.

DID YOU KNOW… When a tenant sets up a drug lab in a property, this falls under deliberate/intentional damage. Many people think it comes under malicious tenant damage, however the intent is to manufacture drugs opposed to damage the property.

Unlike most landlord insurance providers, EBM RentCover offers up to $70,000 cover for intentional damage (including drug lab clean-up).

Note: The residential tenancy legislation in a number of jurisdictions has been amended to allow tenants to make ‘minor modifications’ to the property with or, in some instances, without the landlord’s consent. Before submitting a claim for deliberate damage, check your state/territory tenancy act as the relevant legislation will provide guidance as to whether you have a valid claim or not.

A word about wear and tear

It is important not to confuse damage with normal ‘wear and tear’. Wear and tear is damage that occurs over time and is simply a result of the use of the property as a home. Examples include:

• carpet being worn in high-traffic areas,
• exterior paintwork fading as a result of sun exposure,
• minor scratches on kitchen benchtops, and
• scuffed walls.

This kind of wear is to be expected, it is not considered by insurers to be ‘damage’, and it is not covered by insurance.

To summarise

When it comes to tenant damage, it is the intention behind the damage that can determine if the landlord has a claim or not. Unlike EBM RentCover, not all tenant damage – accidental, malicious, deliberate – is covered by other landlord insurance providers. Knowing the different types can help ensure you take out a policy that suits your needs.

Want to chat about EBM RentCover policies? Give the EBM RentCover team a call on 1800 661 662.

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are here, contact 1800 661 662 if you have any questions.