This document discusses the differences between accidental damage, malicious damage, deliberate damage, and wear and tear from an insurance perspective. It provides examples of each type of damage. Accidental damage is unexpected loss, while malicious damage is intentional damage meant to cause harm. Deliberate damage intentionally alters an item but is not meant to cause spite. Wear and tear is natural damage from living in a property. The document also discusses claims processes and the importance of documentation like entry/exit reports and photos when filing claims.

1. scheer tips
March 2012
report is required for malicious damage
Accidental Damage, claims. Wear and tear and poor housekeeping are
Malicious Damage, not generally covered in an insurance
Deliberate Damage: An act that will alter policy, even where a property may be
Deliberate damage and the current state of an item, however the brand new prior to being occupied by
act is carried out without any spite, malice tenants. As a Property Manager, you can
wear and tear. What is or vindictiveness. An example is putting monitor this during routine inspections and
the difference? picture hooks into walls without outline to the tenants at the outset of the
permission. This is not a vindictive act, it Lease the expectations of cleanliness,
is however a deliberate action but maintaining the property etc. Ensure that
A common query we often hear from generally with the intent of making the they are aware that any damages or
Property Managers and Landlords is ‘what property more homely. maintenance is reported to your office
is accidental damage and how is this immediately and that these are rectified in
different to malicious damage, deliberate Wear and tear: Damage which occurs a timely manner.
damage and/or wear and tear?’ naturally and inevitably simply because
people reside in the property. Wear and Landlords should expect fair wear and tear
From an insurance perspective, we define tear occurs just as much in an owner to their property, as would happen in any
them as per below: occupied property as it does in a rental home that is being lived in.
property and may include scuff marks on
Accidental Damage: An unexpected or walls, carpet in walkways appearing worn,
sudden loss. This is generally something small marks on lino etc.
that is an accident and not planned or
intentional. Examples include spills on Another area of contention sometimes can
carpet and damage to furniture. be ‘poor housekeeping’. This is where a
tenant maintains a property in a poor
Malicious Damage: Damage which was condition but where no damage has
motivated by spite, malice or occurred. This can include tenants who do
vindictiveness with the intention of causing not clean up after themselves, who don’t
damage. Examples include holes kicked/ air their house, who don’t regularly clean
punched in walls and doors, graffiti and areas such as carpets, ovens and
doors knocked off their hinges. A police bathrooms etc.
Comments from Carolyn
It’s March - time to celebrate the best of the best in Australian Real Estate. We are very much looking forward to celebrating the
success of Property Managers at the REIA Awards for Excellence in Darwin later this month.
This month we’re celebrating the efforts of Property Managers. The Property Management division of any Real Estate Agency is
generally the constant cash flow that keeps the business ticking along during down turns in sales. Sadly, it often seems the only time
the value of the Property Management department is recognised is during a down turn in sales. There are savvy property managers
with an entrepreneurial spirit in the industry who have recognised the value in focussing only in managing investment properties rather
than sales and who have opened their own businesses to do just that - we wish them well; there is a lot of value in a business which
focuses on doing one thing better than anyone else. As a property investor myself, I wouldn’t dream of trying to manage my own
property, I just don’t have the time for it and I know it’s in very safe hands with my wonderful Property Manager.
Terri Scheer continues to support and promote property management through sponsorship of major events focused on property
management. You may have heard our new radio ads where we tell people to “talk to their Property Manager” about landlord
insurance, the reason for this is two fold, 1) to prompt those who manage their own property to think about appointing a Property
Manager and 2) to prompt those who don’t have insurance to talk to their Property Manager about it - it’s much easier for you when
the Landlord broaches the subject with you. We’ll also be at the LPMA 2012 Forum at Jupiters on the Gold Coast at the end of April.
We’ve been part of the LPMA Forums since their inception and it’s been fantastic to watch them grow in both numbers of attendees
and in quality of speakers. LPMA is all about excellence in property management and we encourage those who have been thinking
about attending to do so - every opportunity to learn should be grasped.
As always, I welcome your feedback about anything at all to do with Terri Scheer, email me at carolynm@terrischeer.com.au.
To all the finalists in the upcoming national awards, well done on making it to the National Awards; it’s great recognition of your
efforts.
Warm regards, Carolyn
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Insurance otherwise you might be at risk of providing advice. Please contact Belinda Butler belindab@terrischeer.com.au if you need further advice.
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2. scheer tips
A recent claim Leading Property Managers
The benefit to the Landlord in this
situation was that we were able to of Australia 2012 Forum
We have recently dealt with a determine which damage the tenant
situation where the tenant absconded did and what damage the unknown We are proud to support and be a sponsor of this
from a rental property owing rent as person did. This was due to the event and believe that your team may benefit
well as having caused damage to the detailed Exit report the Property enormously by attending.
property. Damages included stained Manager had completed. The The LPMA 2012 Annual Forum will be held at
carpets, holes in walls and writing on landlord was also able to be paid loss Jupiter’s Hotel and Casino on the Queensland
many walls. of rent whilst the property was un- Gold Coast on Thursday 26 April and Friday 27
tenantable as a result of the April 2012 and is open to all industry practitioners
Whilst the Property Manager was damages. across Australia and New Zealand.
organising quotes for repair, there
was a break in (by an unknown When claiming for damages it is For more information about the LPMA 2012
person) who painted graffiti on the important to have Entry reports, Forums, visit www.lpma.com.au/forum or contact
external walls of the house, smashed Routine Inspection reports, colour Dixie Walters at dixie@lpma.com.au (02) 8507
windows and damaged the front door labelled photos and a detailed Exit 2428.
in their attempt to break in. The total
report from the final inspection. These
damages exceeded $5,000.00. documents help us determine the
extent of any damages and how they
As the Landlord had a Terri Scheer may have been caused.
Landlord Preferred Policy as well as
Landlord Residential Building policy, Please remember if you have a
both incidents of damage were situation at a rental property where
covered. The damage by the tenant damage looks likely to exceed $2,000
was covered in the Landlord that you contact our office so that we
Preferred Policy and the damage by can arrange an Assessor to attend
the ‘unknown person’ was covered the property and review the damages.
under the Landlord Residential
Building Policy.
Did you know that any
landlords who sell their
property or that they now
occupy where a Terri Scheer
policy was in place are
entitled to a pro-rata refund
of their insurance?
Simply advise us by
completing the Cancellation
form on your CD and send it
Did you know that Property Managers can through—we’ll do the rest!
arrange cover online? Visit our new website:
terrischeer.com.au
Disclaimer: this publication is intended for general information only. Terri Scheer Insurance accepts no liability for any actions taken by any persons acting on any information contained within this
document. Advice contained within this document is general advice only and has not taken into consideration anyone’s personal financial needs or objectives. Any person considering a Terri Scheer
Policy should first consider the Financial Services Guide and Product Disclosure Statement prior to making the purchase decision.