Rent Guarantee Insurance in the UK: What It Costs, What It Covers and Whether It’s Worth It

Last updated: 8 October 2026 · Next review: April 2027

Rent guarantee insurance pays your rent if your tenant stops paying. For most of the past decade, many landlords saw it as an optional extra. The Renters’ Rights Act has changed that calculation: Section 21 has gone, the main rent-arrears possession ground now requires three months’ arrears, and you can no longer take several months’ rent in advance.

This guide explains what rent guarantee insurance costs, what’s typically covered and excluded, and how to decide whether it’s worth it for you. We don’t sell insurance and don’t earn commission from insurers.

What does rent guarantee insurance cost?

The most detailed published data we found comes from Simply Business:

The example quotes were created between March and June 2026. The “from” price shows what the cheapest policies cost; the named examples are a more realistic guide for a typical house. In practice, most landlords should expect something in the region of £90–£220 a year, depending on the rent level, property and insurer.

Rent guarantee can also be added to a landlord insurance policy as an optional extra rather than bought separately.

What’s typically covered

Based on the policy summary Simply Business publishes:

• Rent arrears — up to £100,000, for up to 12 months of rent.
• Legal expenses — up to £100,000.
• No excess on that policy.
• No waiting period — you can claim from the first missed payment.
• Partial rent after malicious damage — 50% of the monthly rent for up to 3 months if the property is uninhabitable following malicious damage.

Limits vary between insurers, so compare the maximum monthly rent covered, the number of months paid and the legal expenses limit.

What’s typically excluded or conditional

• Referencing is essential. Most policies only pay out if the tenant passed the insurer’s referencing criteria before the policy started.
• Existing arrears aren’t covered. You can’t buy a policy once a tenant is already behind.
• Some tenant types may be excluded. Simply Business says tenants are considered case by case but that students, unemployed tenants and those on state benefits are typically excluded.
• Eviction costs. Check what the legal expenses cover includes — the policy summary notes that some eviction-related costs aren’t covered.
• Notice requirements. Policies usually require you to follow the correct legal process. Some insurer wording still refers to Section 21, which was abolished on 1 May 2026 — check your policy has been updated for the Renters’ Rights Act.

A tension to be aware of

Under the Renters’ Rights Act, you can’t refuse applicants simply because they receive benefits or have children. But some rent guarantee policies exclude tenants on benefits. That means you might lawfully let to a tenant your policy won’t cover. Check eligibility criteria before you agree a tenancy, and consider other protections (such as a guarantor) where a policy won’t apply.

How the Renters’ Rights Act changes the case for cover

Three changes make unpaid rent a bigger risk than it used to be:

1. Higher arrears threshold. GOV.UK says a possession order on the main arrears ground now needs the tenant to owe 3 months’ rent. On £1,200 a month, that’s £3,600 of arrears before you can rely on that ground.
2. No Section 21. You can’t end a tenancy without a ground, so every possession claim relies on evidence.
3. Less money up front. You can take no rent before the tenancy is agreed and no more than one month afterwards — see our deposit and rent-in-advance guide.

Is rent guarantee insurance worth it?

There’s no universal answer, but a simple way to think about it:

Compare the premium with one month’s rent. At £1,200 a month rent and a £220-a-year premium, one month’s rent covers more than five years of premiums. If a single serious arrears case in five or more years is realistic for your property, the insurance pays for itself.

It’s more likely to be worth it if:

• your mortgage relies on the rent being paid every month;
• you have one or two properties, so a single bad tenancy hits your finances hard;
• you don’t have savings to cover several months without rent and legal costs;
• you let at higher rents, where each missed month costs more.

It’s less likely to be worth it if:

• you have a large portfolio and can absorb occasional losses;
• you own the property outright and have strong cash reserves;
• your likely tenants wouldn’t meet the insurer’s criteria anyway.

How to buy it well

1. Reference first. Use a referencing process that matches the insurer’s criteria — some insurers include referencing.
2. Check the limits — monthly rent cap, number of months and legal expenses limit.
3. Check tenant eligibility before agreeing the tenancy.
4. Read the claims conditions — how quickly you must report arrears, and what notices you must serve.
5. Compare standalone vs add-on prices at every renewal.
6. Keep records of every payment, reminder and communication.

Rent guarantee premiums are generally an allowable expense against rental income, like other landlord insurance.

How a claim usually works

The details depend on the policy, but most rent guarantee claims follow a similar path:

1. The tenant misses a payment. Contact them promptly and keep a written record.
2. Notify your insurer within the time the policy requires. Late notification is a common reason claims run into difficulty.
3. Follow the insurer’s instructions on notices and possession steps, using the correct Section 8 ground under the Renters’ Rights Act.
4. The insurer pays the rent (up to the policy limits) while the arrears continue, and, where legal expenses are included, funds the legal process.
5. Recovery. Some insurers try to recover the money from the tenant.

Keep every rent statement, reminder letter and message. The stronger your records, the smoother the claim.

Alternatives and complements to rent guarantee insurance

• A guarantor. A UK-based guarantor who agrees to pay if the tenant doesn’t. With rent in advance now limited, guarantors have become more important.
• Thorough referencing. Checking income, employment and previous landlord references reduces the chance of arrears in the first place — and is usually a condition of rent guarantee cover anyway.
• A savings buffer. Landlords with larger portfolios sometimes “self-insure” by keeping several months’ rent in reserve.
• The tenancy deposit. A deposit of up to five weeks’ rent can be used towards arrears at the end of a tenancy, but it won’t cover a long period of non-payment.

The numbers in context

Under the Renters’ Rights Act, the main arrears ground requires three months’ arrears before a possession order can be made on that ground. On a £1,200-a-month property, the arrears alone would be £3,600 at that point — more than the five-week deposit of about £1,385 — and the rent keeps accruing while the possession process runs. Set against an annual premium of roughly £90–£220, it’s easy to see why more landlords are reconsidering this cover. Add your chosen premium to the landlord cost calculator to see the effect on your net position.

Frequently asked questions

How much is rent guarantee insurance per month? From about £8.40 a month for the cheapest policies, with example quotes of £14.46–£18.33 a month for typical houses (Simply Business, 2026).

Does rent guarantee insurance cover eviction? Many policies include legal expenses, but check exactly which costs are covered.

Can I get rent guarantee insurance for tenants on benefits? Some policies exclude them. Check the insurer’s criteria before the tenancy starts.

Can I buy rent guarantee insurance if my tenant is already in arrears? No. Existing arrears aren’t covered.

Is it compulsory? No. It’s optional.

Sources

• Simply Business — Rent guarantee insurance (pricing data February 2026; example quotes March–June 2026)
• GOV.UK — Renters’ Rights Act: an overview for landlords
• MoneySuperMarket — Landlord insurance
• NRLA — Managing rent payments after the Renters’ Rights Act

Prices are published examples, not quotes. This isn’t insurance advice. Last checked: 8 October 2026.

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• The True Cost of Being a Landlord in the UK (2026)
• Making Tax Digital for Landlords: Does It Apply to You, and When?

Figures are published examples, estimates and averages, not quotes. Rules change: check the linked official source before you act.

About this guide: written and edited by the LandlordCosts Team. We are not solicitors, accountants or insurance brokers; every figure is linked to its source. Read how we research costs, our editorial policy and more about us.