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Get cover that pays out if your tenants default

Rent guarantee insurance for landlords offers cover so you're not left short if your tenants don't pay their rent
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*Terms and conditions apply. Enro Ltd t/a Superscript is authorised and regulated by the Financial Conduct Authority.  FRN 656459.

Last updated
December 20th, 2023

What is rent guarantee insurance?

Rent guarantee insurance covers your lost rent if your tenants don’t pay.

It also offers options to do more than just that - it can also cover the cost of taking a defaulting tenant to court, repossessing a property and even the cost of evicting squatters.

If you rely on your rental income to pay your mortgage, then getting insurance to cover the monthly rental payment from your tenants is worth looking into.

Do I need rent guarantee insurance?

Non-payment of rent can happen to any landlord, no matter how careful you are when choosing your tenants and whether or not you use a lettings agent.

It is even more of a risk when the economy is stretched, and money is tight. If your tenants fall on hard times, they might suddenly be unable to pay their rent.

If you’re a landlord, rent guarantee insurance is a way of protecting yourself. It helps you avoid serious financial challenges due to non-paying tenants and gives you peace of mind that you won’t default on your buy-to-let mortgage.

What does rent protection insurance include?

Included

Rent arrears/rent guarantee
Repossession cover
Rent recovery costs
Eviction of tenants/squatters
Property damage when pursuing a civil dispute
Legal defense cover
Contract disputes cover

Not included

Lost rent if your property is unsafe to let
Vacant periods
Claims for events that occur within the first 90 days of your policy
Unpaid rent for a commercial property

How much does rent guarantee insurance cost?

The price depends on the specific policy you choose. Remember that the cost of rent guarantee insurance is tax-deductible against your rental income.

Superscript's rent guarantee insurance is charged at a flat rate of £9.95, per property, per month, regardless of property type, tenant type and monthly rent.

Remember to check whether you’ll need to pay an excess if you make a successful claim.

Legal cover and rent guarantee insurance costs from[1]
£9.95 monthly
What landlords are paying out on expenses
How much landlords are claiming back from the taxman, on average, for each allowable expense they pay for.

How do I choose the right rent guarantee insurance?

When it comes to finding the best rent protection insurance for you, there are a few things to look for:

The excess fee you must pay to make a claim

A higher excess normally means a lower premium. But you'll have to pay more yourself if you do make a claim.

Any exclusions

Make sure the policy you choose covers your circumstances - if not you might not get a payout.

How much you can claim

Make sure the maximum payout will be enough to cover your needs.

Whether it covers your type of tenants

Some types of tenant are excluded from some policies, for example students and HMOs are frequently not covered.

The price

Insurance is a valuable tool, but make sure you're not paying over the odds for protection.

What other insurance do landlords need?

Buildings insurance

Buildings insurance

If you have a mortgage, you will need buildings insurance - this covers the cost of rebuilding your property, as well as replacement accommodation for residents during repairs, if something damages it.

Contents insurance

Contents insurance

Contents insurance covers the cost of replacing furniture, appliances, carpets and more should they be stolen or damaged.

What other insurance do landlords need?

Buildings insurance

Buildings insurance

If you have a mortgage, you will need buildings insurance - this covers the cost of rebuilding your property, as well as replacement accommodation for residents during repairs, if something damages it.

Contents insurance

Contents insurance

Contents insurance covers the cost of replacing furniture, appliances, carpets and more should they be stolen or damaged.

FAQs

How many properties can I cover on a rent guarantee policy?

You can only cover one property on a rent guarantee policy, so you need a policy for each property you want to cover.

When should I take out rent guarantee insurance?

The earlier you take out rent guarantee insurance the better, because there are often limitations on when you can make claims. You can’t claim for events that occur within the first 90 days. So if the tenant fails to pay on day 30, but then you wait until day 91, the claim would still be denied.

Do I have to pay an excess if I claim?

It depends. Some insurers may charge an excess, while others won’t. Check the terms and conditions of your policy to see how much you would need to pay in the event of a successful claim.

Will I have to reference check my tenants?

Yes, most rent guarantee policies need your tenants to be reference checked before cover starts. Some also ask your tenants to be credit checked.

Landlords must agree that: "You obtain satisfactory references including background and identity checks on each tenant and each guarantor from a licensed referencing service before the tenancy agreement starts."

How much does rent guarantee insurance pay out?

This depends on the policy. It usually pays out up to an agreed amount per claim.

In depth guides to landlord insurance

Find out more about the cover available to landlords with our guides.
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About the author

James Andrews
James has spent the past 15 years writing and editing personal finance news, specialising in consumer rights, pensions, insurance, property and investments

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References

1. Superscript - Landlords' legal protection and rent guarantee insurance costs from