DSS landlord insurance

The rental sector has historically been reluctant to rent to benefit claimants – ‘no DSS’ has been common in rental ads for decades – but increasingly these views are changing.

For landlords, there can be advantages to renting to benefit claimants, especially as the benefits system – often the biggest barrier for landlords who do not want to exclude tenants who claim benefit due to delays in processing claims – is changing in an effort to make it easier for landlords to ensure they receive rent payments on time.

Here’s what to consider about DSS landlord insurance, what it covers, and why you may need landlord insurance for DSS tenants.

These are brief product descriptions only. Please refer to the policy documentation paying particular attention to the terms and conditions, exclusions, warranties, subjectivities, excesses and any endorsements.

A DSS tenant is someone who pays the majority of their rent with Universal Credit.

The term DSS refers to the now-disbanded Department of Social Security, which oversaw benefits payments. Despite the DSS being replaced by the Department for Work and Pensions in 2001, the term is still used by people in the property sector to refer to tenants who are in receipt of housing benefit or Disability Living Allowance (DLA).

The level of coverage a DSS landlord insurance policy will vary, and some insurers may have specific eligibility requirements, such as minimum credit scores, tenant affordability checks or the type of benefits accepted.

Landlord insurance combines different types of insurance to give you a package with all-round protection regardless of how your tenant pays their rent. A landlord insurance policy such as ours can include:

• Property damage

This covers the cost of repairing or replacing the property in the event of damage caused by insured events such as fire, flood, or vandalism. Ours includes malicious and accidental damage by the tenants.

• Loss of rental income

This covers the loss of rental income if the property becomes uninhabitable due to an insured event and the tenant has to move out. It can also include cover for the alternative accommodation needed for the tenant due to an insured event.

• Liability

This can cover legal costs and compensation if a tenant or a third party is injured or their property is damaged due to the landlord’s negligence. It may include cover for property owners’ liability, legal liability as occupier or landlord, and the Defective Premises Act 1972.

• Contents

This can cover damage caused by an insured event to the landlord’s contents, such as furniture and household goods. One way to identify what counts as contents is to imagine flipping the property upside down – anything that falls can be covered by contents insurance. It would not cover a tenant’s belongings.

Tenants may be claiming housing benefits for a number of reasons – it could be through unemployment, disabilities and/or being a single parent – many are working.

Tenants receiving benefits are often seen as higher risk due to the complexities of the system and their perceived ability to meet monthly rent payments.

DSS landlord insurance provides protection for landlords against a range of risks, including damage to the property, loss of rental income, and liability claims.

Some standard landlord insurance policies may not offer financial protection if you let to tenants claiming Universal Credit, while others could charge you higher premiums. Talk to your insurer for more information and to make sure that this tenant type is accepted.

We provide comprehensive cover for residential landlords. Read more about the 40 covers included with our policies as standard on our dedicated Landlord Insurance page.