Landlord Insurance for DSS Tenants

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Landlord Insurance for DSS Tenants

If you are a landlord who lets to tenants who receive Department of Work and Pensions housing benefits, then you may be looking for landlord insurance for DSS tenants.

Several insurance companies will offer landlord insurance for DSS tenants, allowing you more flexibility in choosing who you let to.

What is DSS Landlord Insurance?

An insurance policy for landlords renting out a property to tenants who receive housing benefits is commonly known as Local Housing Allowances (LHA).

Originally, the term DSS referred to the old Department of Social Security, which was responsible for the payment of benefits before being replaced by the Department for Work and Pensions in 2001.

While the DSS department has been renamed, some people still refer to tenants as DSS tenants.

Do I need landlord DSS insurance?

Landlord insurance protects your rental property (or portfolio of rental properties if you own more than one), regardless of who rents it from you.

Building policies protect the building itself and its contents and cover legal costs if a dispute arises.

You aren’t legally required to have landlord insurance, but your lender may insist you obtain a simple policy to at least cover the building if you have a buy-to-let mortgage.

It was once regarded as a risk for insurers to insure landlords who rented to housing benefit tenants due to their less stable financial standing, which could result in them defaulting on their rent. The reality is that any tenant has the risk of defaulting, especially in difficult economic times.

Some councils now pay landlords directly if a tenant defaults, and safeguards ensure that the council pays landlords in this situation.

Do I need DSS rent guarantee insurance?

In today’s economic environment, the risk of a tenant defaulting on their rent payments is significant for all landlords, so it’s worth taking out rent guarantee insurance for your DSS tenants.

However, DSS rent guarantee insurance can be hard to get because many insurers see DSS tenants as representing a higher risk of default.

Before taking out rent guarantee insurance, you’ll have to run a credit check and an affordability check.

These checks will have to be performed no matter who you rent to. However, because housing benefit recipients are often from lower-income households, there is a greater risk that they won’t meet your insurance provider’s criteria for rent guarantee insurance.

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Is DSS landlord insurance more expensive than standard landlord insurance?

For DSS tenants, landlord insurance can be more expensive, but the actual cost will depend on several factors, including the property’s characteristics.

Factors that will impact the premium you are quoted will include:

  • Location of your rental property
  • Age of the rental property
  • The property type – for example, a detached house, a semi-detached house, a terraced house, a bungalow or an apartment
  • What kind of roof does it have, whether it’s flat, timber-framed, or thatched
  • As to whether it’s been underpinned or suffered subsidence
  • Whether you’ve filed a claim on your landlord insurance in the past five years
  • There are many optional extras you can choose from – for example, a comprehensive policy will cost more than a very basic policy

Landlord insurance for DSS tenants

When looking for landlord insurance for DSS tenants many online quote forms will have a tenancy type option in which you can enter ‘DSS’. Once you have completed the rest of the form, you will be shown a selection of offerings.

When deciding on a landlord insurance policy, consider what features would be advantageous to your specific requirements to find a level of cover that you are happy with.

Features and optional extras of different landlord insurance policies may include:

Buildings Insurance

Protection for the building’s physical structure, this type of insurance should cover the cost of clearing the land and rebuilding the property if it were to be destroyed by an insured event.

Contents Insurance

If you rent a property as fully or partially furnished then contents insurance will protect the furniture, furnishings and appliances that you provide. When looking at contents cover, you may choose between indemnity or new for old cover.

Landlord Liability Insurance

If a tenant or visitor was to make a personal injury claim having landlord liability insurance in place can help cover your legal costs, and if you were found to be at fault it could cover the claimant’s legal costs as well as their compensation.

Rent Protection

If an insured event was to happen, that meant you suffered a loss of rental income having rental protection insurance in place could reimburse you this amount.

Alternative housing cover

If an insured event occurred and so severely damaged your property that it meant it was not habitable, having alternative housing cover in place will cover the cost of providing your tenants with somewhere else to live while the needed repairs are made.

When looking for landlord insurance for DSS tenants, you should shop around thoroughly beforehand to try and find the best policy available to you.

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