Rent Guarantee Insurance – Does It Really Work for Landlords?

Property118

Rent Guarantee Insurance – Does It Really Work for Landlords?

Tenant default is one of the biggest risks for landlords. Even with strong referencing, job losses, illness, or disputes can leave tenants unable or unwilling to pay. Rent guarantee insurance (RGI) promises to protect landlords against these losses, but the detail of each policy makes a huge difference. This article explains how RGI works, what’s usually covered, common exclusions, and what landlords should check before buying.

What Rent Guarantee Insurance Covers

A typical RGI policy pays landlords when tenants stop paying rent, usually from the date of default until the tenant vacates or possession is obtained. Cover usually includes:

• Monthly rent payments – up to a specified limit (e.g. £2,500 or £3,000 per month).
• Maximum duration – often 6 or 12 months of unpaid rent.
• Legal expenses – to fund possession proceedings and eviction if necessary.
• Alternative accommodation – occasionally included if tenants must be rehoused during legal processes (less common).

Eligibility and Referencing Requirements

RGI is not a blanket safety net. Policies are only valid if strict referencing criteria are met at the start of the tenancy. Typical requirements include:

• Full credit check – confirming no adverse CCJs or bankruptcies.
• Employer’s reference – verifying stable employment and sufficient income.
• Previous landlord reference – for existing tenants moving between rentals.
• Guarantor – sometimes required for students, self-employed tenants, or those with weaker credit.
• Deposit compliance – correct registration of deposits or valid deposit replacement schemes.

Failure to meet or document these requirements is the most common reason claims are declined.

Exclusions to Watch For

• Pre-existing arrears – cover only starts for arrears after the policy is in place.
• Unreferenced tenants – if references aren’t completed to the policy standard, claims may fail.
• Tenancy type restrictions – some policies exclude HMOs, students, or DSS tenants unless approved in advance.
• Delays in notification – landlords must notify insurers quickly once arrears begin, often within 30 days.
• Void periods – rent guarantee only covers arrears, not general voids between tenancies.

RGI vs Loss of Rent Insurance

Landlords often confuse rent guarantee with loss of rent cover. They are very different:

• Rent guarantee – covers unpaid rent due to tenant default.
• Loss of rent – covers loss of income after an insured peril (e.g. fire, flood) makes the property uninhabitable.

Both types of cover are valuable, but they serve different purposes. Savvy landlords often hold both.

Case Example

A landlord let a flat to a young professional. Six months in, the tenant lost their job and stopped paying rent. Because the landlord had completed full referencing and notified the insurer within the policy deadline, rent guarantee insurance paid the monthly rent for nine months until possession was regained. The policy also covered legal fees for eviction, saving the landlord thousands of pounds. Without RGI, the landlord would have lost over £12,000 in income.

Checklist Before Buying RGI

• Confirm the monthly rent limit covers your tenancy.
• Check the maximum payout period (6, 12, or more months).
• Review eligibility rules – referencing, guarantors, tenancy type.
• Understand the notification window for arrears.
• Clarify whether the policy includes legal expenses and up to what limit.

Final Thoughts

Rent guarantee insurance can be a lifesaver for landlords, but only if the referencing process is followed and claims are reported promptly. For those willing to maintain good records and act quickly on arrears, it provides valuable cash flow protection. Always check the small print before relying on it.

Request your quote or call-back

The most efficient way to get a personal quote with the best price and cover possible is to call the team on 01832 770965 so we can focus on your enquiry when you are ready and sitting down with your portfolio details to hand.

Alternatively, you can use the form below to request one of our team to give you a call back.

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Publication date: Tuesday 27 January 2026

The post Rent Guarantee Insurance – Does It Really Work for Landlords? appeared first on Property118.

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