Three words get used interchangeably, and they mean three different things. One of them is often not something that exists in private tenancies at all.
The difference matters, because it decides who pays, who is responsible, and what happens when the bill arrives.
Here are the three, one at a time, in plain language.
In short
- A deposit guarantee means that a third party provides the security to the landlord instead of the tenant's own cash. The tenant pays for the guarantee and remains responsible.
- Landlord insurance covers the landlord's documented losses beyond the security provided, according to the terms of the policy.
- Indskudsgaranti is used in a housing context mostly about social housing and about municipal loans for a resident's deposit. It is not a product in private tenancies, and the word is also used for something entirely different in banking.
- A guarantee is not insurance, and insurance is not a provision of security.
- The last two can be used together, because they cover different parts.
Deposit guarantee
A deposit guarantee takes the place of the cash deposit. The tenant pays an amount to the provider instead of tying up the whole security, and the provider issues the guarantee to the landlord.
How it works:
The landlord has an agreement with the provider. The tenant cannot choose the solution alone.
The tenant is credit assessed. Without approval, the guarantee cannot be issued.
The tenant pays for the guarantee on an ongoing basis. That amount is not savings, and it is not paid back.
At move-out the tenancy is settled as normal, and the tenant pays legitimate claims.
If the tenant does not pay, the landlord can claim against the provider on the agreed basis. The provider can then claim the amount from the tenant.
What matters for the landlord: a guarantee is a different instrument from cash. You still decide what security you require, and you should ask about the basis for payout, the maximum amount and the period of validity before you accept a guarantee from any provider, ourselves included.
What matters for the tenant: you get freer liquidity at move-in, and you keep your responsibility at move-out.
Landlord insurance, also called rental insurance
Landlord insurance is a policy taken out by the landlord. It covers the landlord's documented losses when the tenant has breached the tenancy, and when the loss sits beyond the security provided.
How it works:
The landlord takes out and pays for the insurance.
The cover follows the terms, and there is typically an excess.
The security is used first. The insurance covers what sits on top.
A claim requires documentation: move-out inspection, move-out report and a settlement item by item.
It is the only one of the three made for the amount on top of the security. That is why it makes sense alongside a deposit or a guarantee, and not instead of one.
Indskudsgaranti
Here the word is used for two different things, and neither of them is a product in private tenancies.
In a housing context, indskud belongs in social housing. There the resident pays a beboerindskud, and some residents can apply to the municipality for a loan for it. It is a public scheme with its own conditions, and it exists because the deposit is also part of financing the home. If you are seeking help with a deposit in social housing, it is the municipality you should contact, not a commercial provider.
In banking, indskydergaranti refers to the cover for money you hold at a financial institution if the institution fails. That has nothing to do with rental homes.
So: if you have a private rental home and are looking for an alternative to the cash deposit, the word you are looking for is deposit guarantee.
The three side by side
Who pays? Guarantee: the tenant. Landlord insurance: the landlord. Beboerindskud in social housing: the resident, possibly with a municipal loan.
What does it solve? Guarantee: that there is security, without the tenant tying up the whole amount in cash. Landlord insurance: the loss beyond the security. Indskud: part of the financing of the social housing unit, and at the same time the resident's provision of security.
Does the tenant remain responsible? Guarantee: yes. Landlord insurance: the tenant's responsibility is not changed by the landlord having a policy. Indskud: yes, it is settled at move-out.
Is it insurance? Guarantee: no. Landlord insurance: yes. Indskud: no.
What to ask about, whatever the product is called
Who provides the security, and who is liable?
When is a payout made, and on what basis?
Which objections from the tenant have to be respected before a payout is made?
How long does it last, and what brings it to an end?
What happens if the tenant does not repay afterwards?
What documentation is required from me?
If you do not get clear answers to those six questions, the security is not settled, whatever word is printed on the product.
How it fits together at Keyhole
Keyhole Guarantee is a deposit guarantee. It is provided to the landlord instead of the tenant's cash deposit, it requires the landlord to be a Keyhole Partner and the tenant to be credit approved, and the tenant remains responsible at move-out. It is not insurance.
Keyhole Landlord Protection is landlord insurance developed together with TRYG. It covers documented losses beyond the security provided, according to the terms.
The two are made to be used together. One makes sure there is security. The other covers when the security is not enough.
Frequently asked questions
Is a deposit guarantee insurance?
No. It is a guarantee provided to the landlord. The tenant pays for it and remains responsible.
Does the tenant get the money back for a guarantee?
No. The payment is the price of the guarantee and is not savings. A cash deposit, by contrast, is settled and paid back after deductions.
Can a tenant choose a deposit guarantee on their own?
Only if the landlord has an agreement with the provider and accepts the solution.
Are indskudsgaranti and deposit guarantee the same thing?
No. Indskud belongs in social housing and in banking. Deposit guarantee belongs in private tenancies.
Can I have both a guarantee and landlord insurance?
Yes. They cover different parts.
What if the tenant is not credit approved?
Then the guarantee cannot be issued, and the security has to be provided another way.
See how Keyhole Guarantee works for landlords
Go through the terms, the basis for payout and what is required before you decide.
Book a conversation
Talk to Daniel about which combination suits your tenancies.
Sources
- The Danish Rent Act (retsinformation.dk), deposit, prepaid rent and provision of security
- The Social Housing Rent Act and the Social Housing Act (retsinformation.dk), beboerindskud
- Borger.dk, loans for a resident's deposit
- Keyhole Guarantee, terms and conditions
- Keyhole Landlord Protection, landlord insurance developed with TRYG