Rent guarantee insurance: how much does it cost?

Rent guarantee insurance typically costs about £170–£370 per property per year as a standalone policy, or roughly £100–£200 a year when added to a landlord insurance policy. It pays out if a tenant stops paying rent, usually up to a monthly and overall limit, and often includes legal costs to recover possession.

We are not an insurance broker and this isn’t advice; compare policies and read the policy wording.

Typical costs

These are indicative ranges from comparison and broker sites, not quotes. Higher rents, higher monthly limits and lower excesses usually cost more.

What rent guarantee insurance usually covers

Policies differ, but they often include:

• Unpaid rent. Payments for missed rent, up to a monthly limit and a maximum number of months.
• Legal expenses. Costs of serving notice and taking possession proceedings through the courts.
• Rent until possession. Some policies keep paying until you get the property back, within the claim limit.

Ordinary landlord insurance usually only covers loss of rent if the property can’t be lived in after something like a fire. That is different from a tenant not paying. See landlord insurance cost for what standard policies include.

Typical conditions to check

Rent guarantee policies tend to have stricter conditions than other landlord insurance. Policies often:

• Require referencing. The tenant must usually pass a credit and affordability check that meets the insurer’s criteria before cover starts. Some insurers specify the referencing firm. See tenant referencing cost.
• Require a guarantor if the tenant doesn’t meet the income test, and reference the guarantor too.
• Exclude existing arrears. Many require the tenant to be up to date with rent when the policy starts.
• Have an excess. This is often expressed as the first month’s rent or a set number of days.
• Cap claims. A monthly limit (for example, a maximum monthly rent) and an overall limit or maximum number of months.
• Set notification deadlines. You may need to tell the insurer within a set time after rent is missed, or the claim may fail.
• Require compliance. Some policies expect the deposit to be protected, the tenancy to be in writing and safety certificates to be in date.

A policy you can’t claim on is worth nothing, so read the conditions before the tenancy starts, not when the rent stops.

How it works with the Renters’ Rights Act

Since 1 May 2026, section 21 has been abolished in England. Landlords can only regain possession using the grounds in section 8, which the government’s guide to the Renters’ Rights Act sets out, including the rise in the arrears threshold from 2 to 3 months. For rent arrears, the key ground is:

This affects rent guarantee insurance in two ways:

• Claims may run longer. Without section 21 as an alternative, possession for arrears relies on section 8. It is worth checking how many months of rent a policy will pay, and whether that covers the time to reach the arrears threshold, serve notice and go through court.
• Policy wording may have changed. Policies written before May 2026 may refer to section 21. If you renewed a policy, check it reflects the current rules.

All tenancies in England are now periodic, so also check how a policy treats periodic tenancies and when cover renews. Our Renters’ Rights Act guide explains the possession grounds and notice periods.

Other ways landlords manage arrears risk

Insurance is one option. Landlords also manage the risk of unpaid rent by:

• Referencing thoroughly. Checking income, credit history and previous landlord references before agreeing a tenancy.
• Asking for a guarantor where a tenant’s income is borderline.
• Taking a deposit. In England the cap is 5 weeks’ rent where annual rent is under £50,000, and it must be protected in a government-approved deposit protection scheme within 30 days.
• Acting early. Talking to a tenant as soon as a payment is missed often resolves problems before arrears build up.

Note that rent in advance is now capped at 1 month in England, so asking for several months up front is no longer an option.

Is it worth it?

That depends on your circumstances: how much the rent is, how much of a buffer you have if rent stops, and how thoroughly you reference tenants. We can’t tell you whether to buy it. Compare the cost of a policy with the rent you could lose and the legal costs of a possession claim, then read the policy wording carefully.

Insurance is a regulated product. This page is general information only and doesn’t recommend any insurer or policy. If you are unsure what you need, speak to a broker and check they are authorised on the FCA Financial Services Register.