Does home insurance provide coverage for malicious damage?

Malicious damage refers to the act of intentionally damaging property to cause harm. It’s not like natural wear and tear that happens over time without anyone’s intent. For instance, your home’s upholstery is likely to fade with time, which is wear and tear. However, if the curtains in your house are deliberately torn or the carpet has burn marks, that’s considered damage.

Damage to a property could be accidental or malicious. While accidental damage occurs without planning, malicious damage is often driven by anger or spite, with the purpose of harming someone or something. For example, if a tenant purposely cuts curtains, it is malicious damage. However, if somebody accidentally drops cigarette ash on the carpet, leading to burn marks, that’s not malicious.

If you’re an owner-occupier, your home insurance policy is likely to cover you for loss or damage caused by malicious actions, such as vandalism or break-ins. This may include things like smashed windows, graffiti on your walls or other defacing of property. However, most insurers will only consider your claim if you’ve reported the incident to the police.

It’s important to note that while most home insurance policies typically provide coverage against acts of theft and vandalism, there may be certain exclusions or limitations specific to each policy. Therefore it’s crucial to read the Product Disclosure Statement (PDS) thoroughly and compare different insurance products to secure the right level of protection for your house.

If you’re worried about damage to your property and belongings due to theft or other intentional acts, you may consider purchasing both home and contents insurance for comprehensive coverage. While home insurance protects you against any damage to your property’s structure and fixtures, contents insurance can help with the cost of replacing or repairing items within the house damaged by covered events.

It’s possible to purchase home and contents insurance separately or as a combined cover from some insurers. As usual, remember to read the fine print thoroughly for any exclusions and limitations to the coverage.

A standard home insurance policy may provide some coverage against accidental damage caused by tenants. However, remember to check with the insurer regarding the exact terms and conditions. Some home insurers may not offer any coverage during periods when a property is rented out, which means you won’t be protected against any kind of tenant damage, whether accidental or malicious.

As a landlord, you might find it more suitable to purchase landlord insurance compared to regular home insurance. Landlord insurance is specifically designed to protect landlords against the common risks associated with a rental property, including theft and damage caused by thefts.

However, while many insurers offer coverage for accidental damage caused by tenants, make sure you check the policy document carefully regarding coverage for malicious and intentional damage to property. With some insurers, you may need to purchase an add-on cover to protect yourself against malicious damage by tenants or their guests. Check with the insurer regarding the exact nature of the coverage offered, and whether you need any add-ons for comprehensive protection.

A home insurance or landlord insurance policy could provide an effective shield against malicious damage to your property, but different policies may come with their own set of exceptions and limitations that are crucial to understand.

Here’s a list of some common exceptions that may limit your insurance coverage against malicious damage. Keep in mind that all these exceptions may not apply to every insurance policy, so it's advisable to compare different products to find one that best meets your requirements.

Policy specifics

The extent of coverage for malicious damage can vary between home insurance policies. While some policies may offer comprehensive protection against vandalism or intentional harm, others may have limitations or exclusions.

Further, while some insurance policies may offer limited coverage, you may have the option to purchase add-ons that could provide broader coverage for malicious damage. For instance, if you’re a landlord, you may have the option to purchase add-on coverage for malicious damage caused by tenants and their guests on the property.

Damage by specific parties

Some home insurers may exclude coverage for damage caused by your family members or those residing in your household. So, if you or anyone in your household intentionally damages your home, for any reason, your insurance is unlikely to cover the cost. However, if a third party tries to vandalise your home, you could raise an insurance claim provided you didn’t invite the wrong-doer to your property.

Unoccupied house

Some insurers may not cover your property if it is left unoccupied for an extended period, generally over 60 days. Occupancy can mean different things for different insurers. For example, if you’re an owner-occupier and have somebody other than you occupying the property for an extended period, your insurer may deny coverage for malicious damage during such times.

Evidence and reporting

Most insurers require you to report any case of malicious damage to the police promptly. Failure to report such an incident within a reasonable timeframe could affect the fate of your insurance claim.

Dealing with intentional damage to your home can be disheartening. However, such mishaps may occur and it could help to be prepared.

1. Assess the damage

Assessing the extent of the damage will help you with your insurance claim. Remember to take pictures of any damage to support your claim. It’s advisable to maintain meticulous records of all communication with your insurer regarding the claim.

2. Inform the police

To make a claim for malicious damage, you’ll typically need evidence in the form of a police report. Not reporting the incident to the police could impact your insurance claim. 

3. Contact your insurer

Notify your insurance company about the damage as soon as possible, providing them with all the necessary information, including the police report.

Even though insurance provides a safety net, it could help to take measures to prevent the risk of malicious damage. This may not only bring down the risk to your property but potentially reduce the cost of your insurance, too.

Install security systems

Install a robust security system with surveillance cameras and alarms to deter thieves, burglars, and vandals.

Well-lit exteriors

Keep your exteriors well-lit. Most criminal activities happen in the cover of the night, and adequate lighting may reduce the risk to an extent.

Secure your property

Check the locks on doors and windows and ensure they’re working properly. Further, it could also help to install secure fencing around your property to deter intruders.

Carry out background checks for tenants

If you let out your property, make sure you carry out comprehensive background checks to avoid the risk of having somebody notorious living on your property. It also helps to communicate openly with your tenants to help them understand any specific rules you may have around using the property.

Review your insurance cover

Reviewing your home insurance cover from time to time could help you ensure that your home and belongings are sufficiently protected. Auto-renewal of your home insurance policy may help prevent coverage lapses if you forget to renew your insurance on time, but your insurance needs can evolve. A set-and-forget approach to insurance may not always align with your changing circumstances or requirements over time.