Does the tenant type increase my insurance premium?

When dealing with your insurance it is important to let your insurance provider know the tenant type. It is very different with landlords if you have tenants that may be on either housing benefit or unemployed i.e. on universal credit.

You are no doubt aware that the Government has changed payments of housing benefit to universal credit. The whole idea of universal credit is to give tenants the responsibility to pay their own rent. If you are thus receiving money directly from the local authority you will find that this will be swopped over to universal credit and this could affect you. For instance housing benefit rules state that when the tenant goes more than 8 weeks in arrears they will no longer be agreed and you would thus need to ensure what your tenants will be doing in respect of payments and how they will be dealing with it. It would be in your favour with your insurance company because it could reduce your insurance premium if they are now paying you directly.

When you are looking to cover your property to let. Any insurance company will need to know that the premises are being used correctly under the policy that you are taking out. This includes the type of tenant who you intend to let the property to.

This is key to understanding that landlord insurance for housing benefit tenants or the unemployed is a specialist cover.

You will find that people who are on housing benefit or in receipt of universal credit are perceived by insurance companies to be higher risk. Thus they have a tendency to impose specific exclusions of letting out to these tenants.

Their argument is that where tenants are in receipt of housing or unemployment benefit they make less reliable and more troublesome tenants. They may not provide a deposit, against breakages or damages. Not all tenants arrange for their housing benefit to be paid direct from the local authority to the landlord. The benefits are also paid in arrears so sometimes it can be a problem with paying their rent. You might think it is unfair for many insurers to tar all tenants with the same brush. But this may not always be the case as often every insurance company has different criteria.

For instance, one of our provider’s only criteria is in relation to the tenancy agreement and with whom the rent is paid by. For instance if the tenancy agreement is direct with the tenants and they make payment direct to the landlord then there would not be any loading or additional premium with respect to the property. You find that some insurance companies may require references or credit checks but this is not always the case. Credit checks are now such a nature that they are almost no longer carried out within the industry because nobody can give a bad reference and credit is easily obtainable to people so credit checks don’t always give a true reflection of the tenants’ situation.

Other insurance companies may load the premium in the event that there isn’t a direct tenancy agreement with the landlord. These may come under Housing Association and/or asylum seekers, we will come on to this later.

Where the tenant is receiving local or central Government housing benefit allowance etc they must meet the following criteria:-

(a) Tenancies are arranged on an assured shorthold or shorthold tenancy agreement directly with the property owner

(b) Tenancies are for a minimum of six months or more

(c) Vetting checks are carried out before the tenant occupies and are held on file

(d) The property does not consider the tenants referred from Housing Associations

(e) The landlord has full control over who occupies the property

(f) Subletting is not permitted

(g) The risk is not an HMO as defined by the specific insurance company. If it is then this particular insurance company may add an additional loading.

What you need to know when insuring a property that has housing benefit tenants in

When you are looking to let out a property that has housing benefit or unemployed tenants there are several factors you need to keep in mind:-

1. What is your likely target market and is it likely they include tenants that may be unemployed or in receipt of benefits?

2. Have you conducted normal background checks before granting the tenancy?

3. Does the landlord insurance you have impose any restrictions?

4. Are you arranging sufficient buildings and contents cover to cover all of this risk?

5. Have you arranged adequate landlord liability insurance?

We are able to insure your property on any form of occupancy and especially housing benefit tenants. We are a specialist in this market and are able to insure them for you.

Asylum seekers – do I need specialist landlord insurance?

Yes, where you are a landlord there may be occasions where you are offered asylum seeker tenants. They are normally on a short term basis although they can be long term.

You will find that almost all insurance companies won’t cover this type of insurance.

Many private landlords like to help the refugee crisis and provide housing for asylum seekers and refugees and assist the Government in reaching a target of 20,000 Syrians being resettled by 2020. Obviously one of the biggest obstacles, however, is actually insuring them. Many insurance companies do not provide cover for asylum seekers but we can provide you with that type of cover quite easily. We are specialists in this market and are able where many others are not to provide a full insurance cover for your property.

What is the difference between an asylum seeker and a refugee?

Asylum seekers arrive in the United Kingdom and submit an asylum application granting them the legal right to remain in the country whilst awaiting a decision. Did you know for instance in 2015 less than half of those submitting an application were granted asylum in the United Kingdom? The Home office is responsible for accommodating and supporting asylum seekers where an application is being processed. This is known as the national asylum seeker’s support service.

A refugee is somebody who has had their asylum accepted by the Government granting them long term or indefinite stay in the United Kingdom after having proven that they would be at risk if they were to return to their home country. Refugees are entitled under both the United Kingdom and international law to bring their families to join them in the United Kingdom.

Not all asylum seekers are granted the right to stay. Sometimes they are denied protection by authorities. Due to the inability to prove that they would face persecution if they returned to their home country they are then considered to be refused asylum. They have to leave the United Kingdom unless they can show a reason to postpone their return or appealing the decision.

These are not illegal immigrants as obtaining refugee status can often be lengthy and a complex process.

We have specialist insurance companies that deal with this type of insurance as it is not standard. It is known as a nonstandard term and there will be loading in this regard. Yet, due to the markets that we have, we are able to provide a full cover for asylum seekers to include accidental damage. This is rare and we have specific providers who are able to do this.

Please don’t hesitate to contact us to discuss what you would like to cover and how

Why not contact us on 01273 827090 to discuss your insurance.