Guide to rent guarantee insurance

Rent guarantee insurance can offer landlords a financial safety net if a tenant stops paying rent. This guide covers how it works, what it costs, and what you’ll need to have in place before taking out a policy.

Rent guarantee insurance, sometimes called rent protection insurance, covers landlords if a tenant fails to pay rent.

If your tenant falls into arrears, the policy can cover the missed payments and the legal costs involved in recovering possession of your property.

This can include costs for serving notices, legal advice, and eviction proceedings. The level of cover, and any limits on payouts, will vary depending on your provider, so it’s worth checking your policy wording carefully.

It’s also worth knowing that some policies may allow you to claim for lost rent after a tenant has vacated, subject to specific conditions, such as active eviction proceedings or documented rent arrears.

If you use a letting agent or property management company, their service may already include tenant referencing and notice serving. It’s worth confirming what’s covered before arranging separate cover.

Landlord rent guarantee can offer several practical benefits:

• • Financial security: Your rental income is protected if a tenant stops paying, helping you to cover mortgage payments and running costs without disruption.
  • Legal expenses cover: Repossession proceedings can be costly. Rent guarantee policies can cover court costs and legal fees, reducing the financial burden if you need to pursue a claim.
  • Eviction support: Many policies include access to legal support to help manage the eviction process. This is particularly useful given that the government is abolishing Section 21 “no-fault” evictions under the Renters’ Rights Act on 1 May 2026. Once implemented, landlords will need to rely on Section 8 notices to regain possession with a valid legal ground, so having specialist legal support in your corner could be valuable.
  • Helps to provide peace of mind: Knowing your rental income is protected can give you greater confidence as a landlord, particularly if you rely on rent to cover your outgoings.

It’s also worth noting that policies typically won’t cover pre-existing arrears or tenants who weren’t properly referenced, so meeting the insurer’s requirements is essential.

The cost of a rent guarantee for landlords may depend on several factors, including:

• Your location
• Your rental income
• The insurance provider you choose

Location can play a role because rental values vary significantly across the UK, and higher rental income generally means a greater potential payout if a claim is made. The level of cover you choose, including whether you opt for a policy with or without an excess, will also affect the overall price.

It’s worth comparing providers carefully. As well as the premium, look at what’s included as standard, such as legal expenses cover and eviction support, and check any limits on monthly payouts or the total claim period.

At Just Landlords, we have two price options available, both including Insurance Premium Tax (IPT):

• £260 for a policy with no excess
• £210 for a policy with one month’s excess

Opting for a policy with one month’s excess means you’d cover the first month of missed rent yourself before the policy kicks in, which is reflected in the lower premium. If you’d prefer cover from the first missed payment, the no-excess option may be more suitable.

Find out more about our rent guarantee insurance.

If your tenant falls into arrears, most policies require claims to be reported promptly, often within a set timeframe once arrears reach a certain level (for example, one month’s rent).

As part of the claims process, you’ll need to send the tenant a seven-day letter formally requesting payment of rent. Your insurer may also ask for supporting documentation, so it’s a good idea to keep clear records of missed payments from the outset.

If you’re unsure about the process, it’s advisable to speak to your insurer or legal support team as early as possible.

Get more information on how to make a claim.

Referencing is an important part of any rent guarantee policy. To validate your cover, you’ll need to show that you’ve properly vetted your tenants before they moved in. Most insurers won’t accept a claim if adequate references weren’t obtained at the outset.

The following references are typically required before taking out a policy. Several referencing companies can carry out these checks on your behalf.

• Employer’s reference: This confirms the tenant’s salary and employment status.
• Rental sufficiency test: The tenant’s combined annual income is often expected to be at least 30 times the monthly rent.
• Financial reference: This applies where a tenant doesn’t have an employer, for example, if they’re retired, self-employed, or on benefits. References can be obtained from an accountant, the Department for Work and Pensions, or a local council, and may be supported by six months’ bank statements. If the tenant is on benefits, affordability may be assessed at a lower percentage of their income, depending on the insurer. If they’re both employed and on benefits, a mixed approach may apply.
• Licensed credit check: This covers an individual’s credit history, including any County Court Judgements (CCJs), bankruptcies, or enforcement orders from the past six years. In the UK, licensed credit checks can only be carried out by Experian, Equifax, or TransUnion. Tenants should have at least three years of credit history, which typically means they need to be over 21 or have been UK-based for at least three years.
• Previous landlord or letting agent reference: This confirms the tenant has no history of rent arrears and left their previous property in good condition. If the tenant has never rented before, for example, they’ve been living with family, this reference isn’t required.
• Guarantors: If a tenant can’t satisfy the above requirements, a guarantor may be accepted. Guarantors are assessed in the same way as tenants, but the affordability threshold is higher, often around 50 times the monthly rent as annual income. A tenant can have more than one guarantor, and all will be jointly responsible for the full rent.

As well as referencing, the following should be in place before renting out a property.

If you use a letting agent or property management company, check that their service covers these:

• Two forms of ID per tenant: One to confirm name, one to confirm address.
• Tenancy agreement: Just Landlords only accepts Assured Shorthold Tenancies (ASTs) or company lets. Note that rent-to-rent arrangements are not covered. Find out more on tenancy agreements.
• Inventory: A detailed record of the property’s condition and contents before move-in, supported by photographs. This can be used as evidence in any tenancy deposit dispute.
• Rental records: It’s advisable to carry out inspections every three to six months and keep written records of the property’s condition at each visit.
• Right to Rent checks: Since 1 February 2016, landlords have been legally required to check the immigration status of all adult tenants and keep copies of supporting documents.
• How to Rent guide: The government’s tenant handbook must be provided at the start of a tenancy.
• Tenancy deposit protection: Deposits must be protected in one of three government-approved schemes, which can also provide a resolution service if a dispute arises. Find out more in our guide on tenancy deposits.
• Health and safety checks: Annual checks on gas appliances, electrics, and fire safety are a legal requirement.

Choosing a trusted insurance provider can help to give you peace of mind as a landlord. Here’s why so many landlords choose Just Landlords:

• Rated Great on Trustpilot*, with over 1,000 reviews
• Over 25 years of experience providing landlord insurance
• An in-house customer service and claims team based in Nottingham
• Friendly support available by phone, LiveChat, or email

*Correct as at May 2026

Below are some frequently asked questions about legal responsibilities for tenants and landlords.

Please note that these frequently asked questions are not a substitute for the policy wording. For full terms and conditions, please see the policy documentation.

No. All tenants named on the tenancy agreement must be referenced for rent guarantee insurance to be valid.

Most insurers require rent to be overdue by 30 days (one full missed payment) before a claim can be made.

Section 21 “no-fault” notices will be formally abolished on 1 May 2026. After this date, landlords will need to use a Section 8 notice to regain possession.

Under the new Renters’ Rights Act rules, the mandatory ground for serious rent arrears (Ground 8) now requires the tenant to owe at least three months’ rent, and the notice period has increased to four weeks.

Rent arrears are unpaid, overdue debts that occur when a tenant fails to pay rent on time or in full. If arrears are not resolved quickly, a landlord may need to take formal action to recover the debt or regain possession of the property.

The sole purpose of this article is to provide guidance 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 trading as Just Landlords 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.