Customers helped

What is rent guarantee insurance and how much does it cost?

Being a landlord can be a rewarding yet challenging experience. 

Maintaining other properties, ensuring you find the right tenants, and keeping on top of tax bills are some challenges they face. 

Another big concern for landlords is what they can do if their tenants cannot afford to pay their rent. 


  • Rent guarantee insurance will cover rental income from tenants if they cannot pay their rent. 

  • This insurance policy can be added to an existing landlord insurance policy. 

  • There are limits to how much you can receive from rent guarantee insurance. 

  • An insurance broker may be able to help you find the best policy, so you’re covered, regardless of what happens in the future.  

Get financial advice
We’ll find a professional perfectly matched to your needs. Getting started is easy, fast and free.


According to Shelter, half of working renters in the UK, around 3.2 million adults, would only be able to pay their rent for one month if they lost their job.  

With average rents recently hitting a record high, the possibility of renters not being able to afford their rent is increasingly likely.  

However, there are ways that landlords may be able to protect themselves from financial implications if this happens. 

We look at rent guarantee insurance, how it works, what it covers and the pros and cons.  

What is rent guarantee insurance? 

If you’re a landlord, rent guarantee insurance, also known as tenant default insurance, is an optional cover that can be added to landlord buildings or content insurance. 

This policy will cover income from tenants if they cannot pay their rent. The policy covers income up until your tenants start paying rent again, they are evicted or when you hit your maximum limit for rent not paid. 

Your policy may also set a specific number of months (usually either six or 12) that will cover lost income. 

It’s a good idea to work out how long you have until you reach your maximum limit so you know how long your income will be protected.  

Before applying, you should make sure your tenants have undergone credit checks and provided references, as well as use a tenancy agreement that meets your insurance provider’s criteria.  

How can I apply for rent guarantee insurance? 

You can contact your insurance provider to ask about adding it to an existing policy, use a comparison site to shop around or talk to an insurance broker. 

Unbiased can quickly connect you to a qualified insurance broker who may be able to find the best policy for your needs and make sure you’re covered, regardless of what happens in the future.  

How does rent guarantee insurance work? 

First, you’ll need to ensure that rent guarantee insurance is included in your insurance policy. Some providers may only allow you to add this to your policy if you have legal cover.  

Either you or your letting agent will need to make a request in writing that your tenant pays any unpaid rent and follow up again a week later if this hasn’t been paid.  

Some insurance providers require that you have the policy at least 90 days before making a claim, so it’s worth getting this insurance as soon as your tenants move in.  

The next step is to fill in a claims form from your insurance provider and include any evidence.  

Once your claim is approved, your unpaid rent will be covered minus your pre-agreed excess.

Get financial advice
We’ll find a professional perfectly matched to your needs. Getting started is easy, fast and free.

What does rent guarantee insurance cover? 

Rent guarantee insurance usually covers: 

  • Missed rental payments, usually for six to 12 months. The amount you can receive is capped, so it’s worth checking your policy. 

  • Legal expenses that can cover eviction costs, which can be between around £50,000. 

You may also be able to contact a legal advice helpline for guidance.  

It’s worth stressing that rent guarantee insurance can usually only be used if a landlord wants to repossess their property.  

Some scenarios won’t be covered by rent guarantee insurance, such as if you sell the property, disputes over rental contracts, and tenants who are moving out.  

This type of insurance usually won’t cover commercial or overseas properties or higher-risk tenants, plus you may need to cover the first month of missed rent.  

Additionally, if tenants were already in arrears prior to adding rent guarantee insurance, you won’t be covered. 

How much does rent guarantee insurance cost? 

How much rent guarantee insurance will set you back depends on various factors, including: 

  • Property type: The type and size of your property, as well as its location. 

  • Your cover: If you have a more comprehensive cover, this will cost more. 

  • Your tenants: If you have higher-risk tenants, your policy will be more expensive. 

  • Rental income: How much money you receive in rental payments can have an impact. 

  • Excess: A higher excess can make your policy cheaper, but you’ll get a smaller payout. 

  • Legal expenses: If legal expenses are included, your policy will cost more.  

What are the pros and cons of rent guarantee insurance? 

There are many advantages and disadvantages to consider before buying a policy. 

  • You have peace of mind that missed rental payments are covered if your tenants cannot pay. 

  • You may be able to get legal expenses that can help cover eviction costs. 

  • Some policies may offer access to guidance via a legal advice helpline. 

  • You may have to pay an excess for rent guarantee insurance and the first month of missed rent. 

  • Rent guarantee insurance only covers a specific amount of missed rental payments and will likely have a maximum limit.  

  • There are some scenarios where rent guarantee insurance doesn’t offer any cover. 

Looking for financial advice? 

Unbiased can quickly find you a qualified financial or mortgage adviser who’ll help you reach your financial goals by looking at your unique circumstances.

Get financial advice
We’ll find a professional perfectly matched to your needs. Getting started is easy, fast and free.

About the author
Lisa-Marie Voneshen is a Senior Content Writer at Unbiased. She is an award-winning journalist with nearly a decade of experience writing and editing content across various areas, including personal finance and investing.