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Property damage insurance claims surge

13 December 2011 Reporter

Simon Parker

The frequency of property damage claims – both malicious and accidental – has surged by as much as 46 per cent in the past 12 months, according to a landlord insurance company.

“These figures challenge the stereotypes that exist in relation to rental property damage,” Terri Scheer Insurance manager Carolyn Majda said.

“There is a widely-held misconception that good tenants won’t cause damage. The figures show that this is far from true.”

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The Adelaide-based company reported a 34 per cent increase in the frequency of malicious damage claims paid over the past year, while the frequency of accidental damage claims increased by 46 per cent over the same period.

The company said it was unable to report the actual number of claims made due to commercial reasons.

The average size of malicious damage claims increased by 3.6 per cent over the past year, while the average size of accidental damage claims increased by a much higher 16 per cent.

The company said accidental damage can include broken windows, red wine stains on carpet, and damage caused by small children, but excludes gradual 'wear and tear' that has been sustained over time.

While accidental damage claims increased at a higher rate, malicious damage remains a more common type of claim, the company said. The latter also costs more, with the value of malicious damage claims 27 per cent higher than claims for accidental damage.

“Malicious damage is often more extensive than accidental damage and more likely to be spread over a number of rooms,” Ms Majda said.

“Terri Scheer has paid claims as high as $40,000 to repair malicious damage by tenants.

“In addition, malicious damage claims are often accompanied by claims for loss of rental income during the time it takes for the damage to be repaired.

“Our figures can’t tell us why damage claims are increasing, however it might be the result of uncertain economic times.

“When times are tough, tenants may be more inclined to take out their frustrations on their rental properties.”

Property damage insurance claims surge
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