Rent guarantee insurance – what is it and do you need it?

Rent guarantee insurance

April 23, 2018

If you are a buy-to-let landlord, then a product like rent guarantee insurance can help you protect your investment and your rental income. Here we explain exactly what rent guarantee insurance is, what it different policies can offer and where to get the best deals.

According to a recent survey by HomeLet, non-payment of rent was cited as a major problem by 67% of all landlords who have had problems with a tenancy.

No matter how scrupulous you are as a landlord, how rigorous you are with checking and asking for references and how good your letting agent may be – you always run the risk of missing out on rent payments. Even the most conscientious of tenants can get into financial trouble which can lead to missed rent.

As a landlord, missed rental payments can affect your income and risk your ability to pay the mortgage on your buy-to-let property.

That’s where rent guarantee insurance comes in – which can provide peace of mind for landlords knowing that their rental income is protected against defaults.

What is rent guarantee insurance?

Sometimes known as rent protection insurance or just rent insurance, rent guarantee insurance can offer a financial safety net for many buy to let landlords.

A typical rent guarantee insurance policy will cover the rent if your tenant defaults on their payments. There are usually limits to most of these policies, so it is important to read the small print to make sure you are aware of the limitations.

Cover can be purchased for six or 12 months to cover a rental term, and the full cost of the policy is tax deductible against your rental income. The policy will typically pay out up to a certain amount per claim e.g. up to £2,500 per month or until the tenant is evicted.

Most rent guarantee policies will allow you to make a claim when your tenant is one month into rental arrears, although you will usually not be able to make a claim within the first 90 days of the policy/tenancy – so it’s best to arrange the policy sooner rather than later.

Legal expenses

A lot of rent guarantee insurance policies come with legal expenses cover, which is vital if you end up in a legal dispute with your tenant about things such as eviction, rent collection, property damage etc.

Legal expenses cover will help fund any legal costs, so it’s important to check this before you take out a rent insurance policy. You may already have legal expenses cover on another policy, or you might think the level offered by the rent guarantee policy is too high or too small – so double-check exactly what cover you are getting and make sure it is what you need before you sign up.

Tenant references

It is important to note that in order to be eligible for most rent guarantee policies, you need to get the appropriate references for your tenants or in some cases a guarantor.

What constitutes an appropriate reference differs between providers, but it will typically be a written reference from a previous landlord or letting agent, or an employer or credit check.

When you take out a rent insurance policy it is important that you comply with all their tenant referencing demands, otherwise your claim could be refused.

It is also quite common that a rent guarantee insurance provider will ask for a particular tenancy agreement as well as the tenant’s deposit being protected under an approved scheme.

Where to get rent guarantee insurance

There are many providers of landlord insurance products and other related policies, but if you are looking for dedicated rent guarantee insurance providers here’s our top 3:


Endsleigh offers two different levels of rent guarantee insurance – Standard and Gold.


  • Recovery of rent arrears – paid for a maximum of 5 months out of 6 on both a 6 and 12 month policy
  • Up to £15,000 worth of legal expenses cover
  • Cover for disputes relating to repossession and eviction
  • Cover for disputes relating to the recovery of rent arrears
  • Legal costs and expenses for rent arrears and eviction


  • Recovery of rent arrears paid for a maximum of 5 months out of 6 on a 6 month policy
  • Recovery of rent arrears paid for a maximum of 11 months out of 12 on a 12 month policy
  • Payment of up to 50% rent for three months between the successful eviction and you finding new tenants
  • Up to £50,000 worth of legal expenses cover
  • Cover for disputes relating to repossession and eviction
  • Cover for disputes relating to the recovery of rent arrears
  • Legal costs and expenses for rent arrears and eviction
  • Prosecution defence cover if the tenant takes you to court
  • Property damage, nuisance and trespass cover, subject to a £250 excess
  • Accommodation expenses cover – up to £75 a day for a month in the event you are trying to regain possession of your property

Find out more at Endsleigh’s website:


HomeLet’s rent guarantee insurance provides cover for:

Missed rental payments

Cover for rental payments for up to 12 months (with one month excess).

Continued cover when vacant possession is obtained

50% of the rent is covered for three months after vacant possession is obtained, whilst the property is still unoccupied.

Expert support when you need it most

In the event that a tenant breaches their tenancy agreement, our in-house Legal and Claims team will deal with the legal process for you.

Cover for Legal & Claim costs included as standard

Legal expenses covered up to the maximum sum insured of £50,000.

Find out more:

Alan Boswell Group

A rent guarantee insurance policy from insurance brokers Alan Boswell includes:

Rental income cover – Cover for up to £25,000 worth of rental income (maximum monthly rent of £2,500)

Legal expenses cover – Cover for up £100,000 legal expenses for eviction, possession of property, tax investigation and property disputes

Helpline – Access to legal advice helpline 24/7

Guidance – Access to online health and safety documents

Find out more:

Other insurance products for landlords

There are many other forms of insurance that landlords should consider to help protect their investment and income.

First of all landlords need to buy buildings insurance, as this is the responsibility of the property owner. Buildings insurance might include a limited form of contents cover, but it is up to the tenants to take out their own insurance regarding contents and personal possessions.

To help landlords, there are now a lot of dedicated buy to let home insurance policies offering all forms of cover required under one policy.

Read more…