Malicious & Accidental Damage: Who Picks Up The Bill?
Damage from paying guests is a rarity when holiday letting, however, that doesn’t mean it doesn’t happen – it comes with the territory. For a holiday homeowner, it’s a major concern and frustration when damage occurs as there’s an urgency to undertake urgent repairs before the next guests arrive.
Thankfully the majority of incidents will be genuine accidents. But how do you decide whether damage to a holiday rental property was an accident? And who will pick up the bill?
What Is Malicious Damage?
Malicious damage is the result of a willful or malicious act with the intent to cause damage. Generally, it is damage to your property that was not accidental. Would you report it to the police? If so then it can be regarded as malicious damage.
Unfortunately, the nature of malicious damage means it can rarely be prevented.
Over the years Schofields have had their fair share of malicious damage claims. Some examples of malicious damage include:
- A couple went away on a “make or break” weekend. After only a couple of days, the woman decided to leave and her partner decided to stay. However for the remainder of his stay, he trashed the holiday cottage and on his departure, he even attempted to burn the property down.
- When people go away they want to relax, have fun and in some cases, party. Whilst parties are fun they can easily get ‘out of hand’. We’ve seen broken windows, doors that have been ripped off hinges and graffiti all over the walls. Naturally, an unwanted and upsetting surprise for property owners.
- Revellers cause £40k of damage to a holiday home. This rented holiday flat was also trashed after a drug-fuelled New Year party.
As you can see from these examples, the impact of malicious damage is both distressing for the owner and costly.
What Is Accidental Damage?
Most guests are respectful of your holiday home and breakages or damage will usually be a genuine accident. Most guests will report incidents, however, there is a minority who will do their best to hide damage or deny any knowledge of it.
Common accidents that happen when renting out holiday accommodation include:
- Spillages on carpets or soft furnishings
- Scratches along walls from suitcases, or on the floor caused by guests moving furniture
- Young children doodling on the walls/furniture
- Iron mark on carpet
- Cigarette burns
- Stained/soiled mattress
- Ember damage to the carpet/rugs from open fires
- A broken TV/window/coffee table because of ‘indoor sports’
- Scorched worktop
- Broken/jammed DVD player
- Shoe marks on walls from swatting insects
What Type Of Damage Does Your Insurance Policy Cover?
Naturally, damage is inevitable when it comes to renting out your holiday home. Before renting out a property you should discuss damage risks (such as those mentioned above) with an insurance company to clarify what the policy will and will not cover.
Is yours a pet-friendly rental? Did you know that holiday letting insurance policies rarely cover damage caused by pets? Although animals are cute they could knock over objects, chew furniture or soil the carpet. This small detail could result in a lot of costly repairs that have to be paid for by yourself.
It’s also wise to research whether any accidental damage by paying holidaymakers is covered. In some cases, it isn’t which could be another costly expense for holiday home owners. It’s reasonable to inquire whether you can add this cover to your policy.
Although many insurance policies cover malicious damage, not many insurers cover malicious damage caused by tenants/paying guests as standard. Check if your policy does or if it can be added for an extra cost. Also, check if malicious damage by family members is covered.
Wilful and malicious acts can involve instances of arson, causing significant damage. It is important therefore that your insurance covers your holiday let.
Although most holidays are under 30 days, some owners let for a couple of months in the shoulder season. In some instances, rental properties have been used as a cannabis factory. However, many policies are rendered invalid when criminal activity has taken place in a property. Check your cover.
Typically, home insurance policies won’t cover any damage that is directly caused by poor maintenance or wear and tear. This means that old boilers that breakdown, blocked toilets or a leak from a broken roof slate won’t be covered. Due to this, it’s worthwhile to factor in these costs when budgeting.
The Wrong Policy
Some inexperienced or accidental holiday let landlords make the mistake of relying on guests to have their own insurance that covers damage to the property. However, their cover may not be suitable for the value of the property and its contents. It’s the property owners responsibility to ensure the holiday rental is comprehensively insured. As an owner, why take the risk of relying on a ‘cheap’ policy someone else has take out that leaves you uninsured.
A holiday home is open to many unexpected costs that can make owning a property costly. However, investing in an insurance policy that covers your assets can make the whole process much more cost-effective.
Who Is Financially Responsible For Damage?
Whilst infuriating, if damage is discovered or reported you need to decide who is financially responsible.
- Rely on your insurance. However, an excess will be deducted, you may lose any no claims bonus accumulated, plus there is the possibility that your premium will increase following a claim. Also, if the claim is minimal (below your excess) it won’t be worth claiming.
- A popular option of recouping losses is by taking a damage deposit from guests. The security deposit is refundable if there aren’t any damages or deducted from if there are. This encourages guests to respect your property. If the damage exceeds the deposit taken you can always claim on your insurance, but use the damage deposit for the excess.
- Pay out of your own pocket (not ideal).
For damage disputes, you do have the option of suing guests for the financial loss, but this can be a costly and time-consuming process. Plus there is also the risk that your guests don’t have the capital to reimburse you.
Thankfully damages to a holiday property are rare, but you should still have safeguards in place. Ones which protect your holiday home and your finances.
Screening guests is a fairly easy way to decipher whether or not a traveller is a good fit for your property. Usually, you get a gut feeling about a person. Property inspections at changeover and meet and greets are also preventative steps to both reduce and identify damage. Taking a security deposit that can be deducted from if damage can proven is also a safeguard, but above all else – check you have the right insurance for holiday letting.
Note: A Schofields holiday letting insurance policy covers damage by pets and has the option to include accidental and malicious damage cover. If you have any further questions please get in touch – we have dealt with many claims for damage over the last 30 years.
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