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What is Rent Guarantee Insurance?
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What exactly is rent guarantee insurance—and how much does it cost? Below we define this common add-on to landlord insurance to help you decide if you need it or not.
- Rent guarantee insurance defined
- Should I buy rent guarantee insurance?
- Tips for choosing rent guarantee insurance
- Average cost of rent guarantee insurance
What is Rent Guarantee Insurance?
Rent guarantee insurance essentially provides a guarantee that you'll get your monthly rent payments, even if your tenant is unable to pay. So if your tenant faces financial difficulties (e.g., due to job loss or illness) your insurer could cover your lost income.
What's covered?
In addition to covering lost rent if a tenant doesn't pay, a rent guarantee policy usually also includes legal expenses, which can cover the cost of a solicitor and court fees if you need to take your tenant to court (e.g., you need to serve notice or evict them). For reference, an eviction advisor can easily cost £1,000 and submitting an eviction order online currently costs £404.
- Rental payments not made by your tenant (subject to an excess and a maximum cover limit)
- Legal costs (e.g., mediation, solicitor/eviction advisor, court costs, etc.)
Should I Buy Rent Guarantee Insurance?
Could you afford to lose out on a year or more of rental income? Even if a loss of that magnitude wouldn't break you financially, no landlord wants to be in that situation.
This is especially true if your buy-to-let property is a main source of income or there's a mortgage on it—you still have to make your mortgage payments even when your tenants don't pay. Rent guarantee insurance isn't required by law, but most landlords should consider getting this coverage to protect their finances.
It's also worth noting that the Renters' Rights Act 2025, which came into force on 1 May 2026 in England, abolished Section 21 "no-fault" evictions. Landlords must now rely on Section 8 grounds to regain possession, which typically involves a court process — making rent guarantee cover with legal expenses even more relevant for landlords who need help covering the cost of that process.
Will I need to use my rent guarantee insurance?
It's not uncommon for tenants to face money troubles and be unable to pay their rent. In fact, according to the latest Gov.uk data, landlords in England and Wales submitted over 90,000 possession claims in 2025 — continuing elevated levels seen since 2021.
How long will it take to evict my tenant?
The median time from a landlord's initial possession claim to repossession currently stands at around 27 weeks GOV.UK — and a significant proportion of cases take considerably longer, particularly where tenants defend the claim or the case is complex.
What to Look For in a Policy
Rent guarantee insurance can save you thousands of pounds, but it may not work exactly as you thought. For example, a rent guarantee policy may not keep paying for the whole time you're trying to evict your tenant.
- Duration of cover: There are typically limitations as to how long a policy will provide cover. For example, a policy might cover unpaid rent for up to six months or 12 months but not longer—even if your tenant is still living rent-free in your property and you haven't managed to evict them yet.
- Excess: The excess is the amount you must pay towards a claim. The excess on a rent guarantee policy might be 1 months rent, for example—in that case, you're on the hook for the first month of nonpayment and the insurer would cover subsequent months (up to the maximum coverage limit, which you should check, too.)
- Waiting period: Some policies start cover immediately, while others impose a few month waiting period (that means if a default happened during the waiting period, you wouldn't be covered).
- Coverage limit: Rent guarantee policies will have coverage limits. Once an insurer pays out the maximum, they'll stop paying you even if your tenant is still in your property and not paying rent. Nearly all policies will have a maximum overall limit (e.g., £25,000 or £50,000). If a policy is not customised to the amount of monthly rent you charge, it might also have a monthly limit (e.g., £2,500 per month).
- Inner limits: A policy might impose inner limits on expenses such as mediators or eviction specialists. (e.g., max £1,250 for eviction advisor)
- Terms If you don't abide by the rules of a policy, you might lose cover. For example, there may be rules on notifying the insurer of the default within a certain time period (e.g., 45 days), the checks you carry out on tenants, etc.
What's not covered?
As with any insurance coverage, there are exclusions. We looked at a number of policy wordings for rent guarantee insurance to look for common exclusions. While the list below is not complete, as exclusions will vary from insurer to insurer, this can give you an idea of what to look for and what might be excluded from cover.
- Rent not paid because the landlord didn't perform obligations of the tenancy agreement
- Non payment of a service charge
- If you notify the insurer too late (e.g., more than 45 days after the first breach of the tenancy agreement by the tenant)
- If the proper steps weren't followed with regards to contacting the tenant about the non payment
- If the arrears arose within a certain number of months of the policy start date (some policies have a waiting period, although some start immediately)
- If you have missed a required reference or tenant check
Note: rent guarantee insurance doesn't cover non-payment if your tenant moves out because your property has become uninhabitable due to physical damage like flooding. That would be covered under loss of rental income insurance. Read about the differences between rent guarantee and loss of income insurance here.
How to Make a Rent Guarantee Claim
If your tenant stops paying rent, acting quickly and following the correct procedure is essential to ensure your claim is valid (and gets paid!).
First, contact your insurer as soon as you become aware of the missed payment, as many policies require you to notify them within 30 to 45 days of the first default, and failing to do so could invalidate your claim.
Be sure to keep detailed records of all communication with your tenant, including emails, letters, and phone calls about the missed payments. Your insurer will typically require you to follow a specific process before they'll pay out, which usually includes sending formal written notice to the tenant demanding payment and giving them an opportunity to remedy the situation. Make sure you ask the insurer what they require from you.
You'll need to provide documentation such as the tenancy agreement, proof of the tenant's identity checks and references you obtained at the start of the tenancy, bank statements showing missed payments, and evidence of your attempts to contact the tenant. Most insurers will also require you to begin legal proceedings to evict the tenant before they start paying out under the rent guarantee cover. But don't try to evict the tenant yourself or take matters into your own hands, as this could breach the terms of your policy and void your cover (as well as cause other untold problems).
Throughout the process, keep your insurer informed and follow their guidance—they often have specialist teams who can advise you on the correct legal steps to take to ensure the process goes as smoothly as possible.
How Much is Rent Guarantee Insurance?
The average cost of rent guarantee insurance for a typical UK rental property is around £46 a year when bought as an add-on to landlord insurance, according to our research of half a dozen online quote systems gathered across a range of monthly rental incomes.
| Average Cost of Rent Guarantee Income, by monthly rent | Annual Premium | Percentage of Rental Income |
|---|---|---|
| £800 | £41 | 0.4% |
| £1,000 | £46 | 0.4% |
| £2,000 | £75 | 0.3% |
| £3,000 | £114 | 0.3% |
| £4,000 | £151 | 0.3% |
What affects the cost of rent guarantee insurance?
The cost of rent guarantee insurance depends on many factors. For example, the more you charge to rent out your property, the higher the risk to the insurer should the tenant default (they'll be on the hook to pay you more money)—so the higher the premium.
And the premium will also reflect the financial security of your tenants. For example, employed professionals are typically more financially stable than a student, so an insurer might charge less to guarantee rent if you have a professional tenant vs. a student or someone on benefits.
- The amount of rent you charge each month
- The type of tenant that occupies your property (e.g., employed, student, DSS, etc.)
Recap
To help protect you financially if a tenant defaults, rent guarantee insurance can replace lost rental income so you can cover your mortgage and keep your income flowing. Given the relatively low cost of rent guarantee insurance (approximately 0.3% to 0.4% of your rental income), it's an add on that many landlords would be wise to consider.