Six tenant types to consider when buying insurance

When choosing a Landlord Insurance policy, it is possible that you will have to confirm the type of tenants you let your property to. Some insurance policies may have specific clauses or considerations based on the type of occupancy. It's important to provide the correct information when obtaining a quote. 

Gallagher, the NRLA’s trusted Landlord Insurance partner, has provided a breakdown of the different tenant types that may appear on a quote form. 

Different types of tenants can impact the cost of a Landlord Insurance policy and whether a quote can be provided at all. 

If you have specific concerns or questions about your policy, contact your insurance provider directly to check you have suitable cover. 

The list can differ depending on the insurer and their criteria for providing cover. To get a quote, you may have to confirm which of the following best describes your tenants. This can include: 

• Asylum seekers 

• Benefits-assisted tenants 

• Non-working tenants 

• Retired tenants 

• Students 

• Working tenants 

People from all over the world come to stay in the UK as asylum seekers, and residential landlords can help by providing suitable housing. You can check with your local council if there are any housing schemes to offer support. 

If you let your property to asylum seekers, make sure you’ve informed your insurance provider about this, so they have the correct details for the policy about the occupancy type. 

With suitable housing stock in ever-short supply and councils struggling to find suitable accommodation for people who need it, private landlords are increasingly stepping up to house tenants claiming benefits. 

While there are advantages to renting to benefit claimants, it’s worth looking into the process thoroughly. 

The introduction of the Universal Credit system put responsibility into the hands of the tenants. Delays in Universal Credit payments and tenants having to juggle other costs can lead to rent arrears. However, landlords and tenants can look to set up an Alternative Payment Arrangement, which means the housing element of a tenant’s Universal Credit might be able to go directly to the landlord to cover the cost of rent. 

For some insurers, this type of occupant may have an impact on the quote they provide. You can contact insurance providers to find out if this will likely be the case. 

Unemployed tenants with no support of income can be a risk for landlords, as there’s no guarantee that rent payments will made on time or at all. Tenant background checks can help to provide peace of mind that the tenant is financially stable. Having suitable Rent Guarantee Insurance can help if a tenant goes into arrears for rent, with successful referencing checks required for a policy to be provided. 

Retired tenants may have a stable income from pensions or savings, which can be seen as a positive factor during tenant checks. This stability might be viewed favourably by insurers.

Letting to students can be an excellent option for landlords with property in university areas. There is likely to be constant demand, with new students moving into the area regularly. 

When choosing an insurance policy, it can be important to consider accidental damage cover if you’re expecting tenants to be regularly moving in and out. There also might be specific requirements when renting to students, especially as your property may be unoccupied for several weeks during term breaks. 

When renting to individuals who are in full-time and permanent employment, this can indicate a reliable and stable income of rent. However, you can never know for certain what the future holds for any individual, which is why it can be beneficial to consider Rent Guarantee Insurance, as well as suitable Landlord Insurance for your buildings and contents. 

As well as helping to provide assurance that you are renting to reliable tenants, a benefit of performing a background check before agreeing a tenancy is that you can confirm what type of tenant they are. 

A full tenant check, like the one provided by the NRLA, can provide a tenant credit check, obtain references from employers and previous landlords, and confirm previous property ownership and bank account details. 

With vast experience handling insurance policies for a wide range of landlords, and with relationships with some of the leading insurers, Gallagher aims to simplify your insurance arrangements and help to protect your property, its contents and your liabilities.

Alternatively, speak to the specialist Gallagher team on 0800 612 0094. 

The sole purpose of this article is to provide information on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited and National Residential Landlords Association, an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein. 

National Residential Landlords Association is an introduce appointed representative of Arthur J. Gallagher Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 55 Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909.