Finding the Right Insurance for DSS Tenants

Owners of let properties take significant risk in renting to what are in effect total strangers, and that risk is arguably greater when renting to beneficiaries of DSS housing benefits. Of course, insurance companies see this category of renters as high risk, and that is why many refuse to provide insurance to landlords with DSS tenants. That isn't to say it is inconceivable to get coverage nevertheless, seeing that there are reputable, established insurance providers who do offer DSS tenants insurance cover.

DSS housing benefits, now governed by the Department for Work and Pensions, are given to low income individuals in the form of Local Housing Allowance (before April 2007 it was known simply as Housing Benefits). Private landlords who let their properties to tenants who have been referred through the DSS or local Housing Association are encouraged to protect themselves against possible property damage, rent loss and liability issues by obtaining specific landlords insurance for DSS tenants. The insurer will appraise the tenant's risk level and use that to establish the insurance cost.

DSS insurance, like any common household insurance policy, will protect the property from structural damage caused by accidental disasters such as fire or burst water pipes so you, as the landlord and property owner, won't have to pay directly out of pocket for the vital subsequent repair work. As an extension to the policy, it is also possible to add optional coverage for loss of rent should the damage from an insurance-covered event be so hefty that the house is unoccupiable.

Protection for contents inside a let property that belong to the landlord, such as furniture (if letting a furnished property), carpeting, curtains, bathroom fixtures and kitchen appliances, can also be included in DSS insurance policies. Although an entire group can't be stereotyped as all being awful tenants, and of course receiving benefits doesn't automatically make an individual disreputable, DSS tenants do have a dubious reputation and a typical problem landlords have reported experiencing with such tenants is ill-treatment of property. So having the security of contents coverage is an crucial feature of DSS insurance.

Another essential non-compulsory feature that can be included is liability coverage, which will help safeguard landlords against any claims a tenant makes against them, for example if a tenant suffers an injury caused by a faulty component on the property.

Unlike Housing Benefits that the DSS generally passed on directly to the recipient's landlord, Local Housing Allowance is paid to the recipient, who is then obliged to use it to pay rent. Seeing that income is an issue for DSS recipients, who range from single mothers whose number 1 priority is to feed and clothe their children, people on disability with no working source of income, recently laid off professionals looking for a new job and people who have been unemployed for some time, even the most well intentioned of tenants may have difficulty meeting their monthly rent payments, specially as any difference between the benefit amount they receive and the rent amount has to come out of their pocket. To shield against this risk, DSS tenants insurance includes optional rent guarantee coverage, which landlords who depend on receiving regular monthly rent cheques should certainly get.

Landlords have an investment to defend, and it defeats the aim of having an investment that is supposed to generate income if it starts costing more money than it earns. That is why insurance coverage is vital, and landlords need to make certain they get the right coverage seeing that if a property inhabited by DSS tenants is insured by a policy that is not directed explicitly for DSS tenants, there could be problems in the long run when claims on the insurance need to be made.