Energy theft poses a serious threat to landlords’ properties and finances. For these reasons, it’s wise to ensure you have good insurance cover. Below are some issues you could encounter and the insurance to protect against them.
• Explosion or fire. If you have landlord insurance covering the building, you should be covered in the event of an explosion or fire. Your policy will allow for the repair or rebuild of the property as appropriate. However, if you knew your tenants had tampered with the energy supply and hadn’t reported it, your policy would likely be invalidated.
• Damage to gas / electricity equipment. This is a difficult situation to insure. If you know a tenant has damaged equipment, you may be able to claim under malicious damage insurance if you report it to the police and get a crime reference number. Otherwise, you’ll probably have to pay to put any damage right.
• Uplift in energy bills. Unfortunately, you can’t insure against this. If you are responsible for paying the bills and pass on the cost via the rent, you’ll have to pay for any stolen energy. However, if utility bills are included in the rent, tenants have no real motivation to steal energy unless they set up a cannabis farm (bypassing the meter will prevent suspiciously high readings). On the positive side, if a tenant is responsible for energy bills, they are liable for the cost of stolen energy, even if they have since vacated the property.
• Cannabis farms. If a tenant damages your property by installing a cannabis farm, your landlord insurance policy usually covers this (subject to limits and conditions being met). If you have legal expenses insurance, this would cover eviction costs and any legal and court fees.