Rent guarantee insurance

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  • Get a quote in less than 8 minutes

  • Cover for loss of rental income

  • Specifically designed to cover landlord needs

What is rent guarantee insurance?

Rent guarantee insurance, also known as rent protection insurance or tenant default insurance, is designed to cover your monthly rental income if a tenant doesn’t pay. As part of your landlord insurance policy, you can typically make a claim on rent guarantee insurance if your tenant is more than 30 days behind on rent.

Rent guarantee cover allows you to claim for a fixed amount of time, normally 12 months. Within that time, landlords hope the tenant will have either started paying the rent again, left the property of their own accord or eviction proceedings will have run their course.

On most rental guarantee insurance policies, you can only make a claim if you’ve served the tenant(s) with a Section 21 or Section 8 notice, formally asking them to move out of the property.

What does landlord rent guarantee insurance cover?

Rent guarantee insurance covers the monthly rental payment if your tenant doesn’t pay. All policies differ, but if you buy through Confused.com you’ll get:

  • Up to £50,000, with no monthly rental limit
  • Lost rent for up to 12 months
  • Up to £50,000 towards legal expenses

There’s no excess on rent guarantee cover bought through Confused.com.

Tenant default insurance is only available alongside legal expenses insurance through Confused.com. The legal expenses insurance includes cover to repossess the property, evict tenants and recover rent arrears as well as giving you access to legal advice.

Along with legal expenses cover, you’ll also need to take out property owners’ liability insurance when you take out rent guarantee insurance.

Property owners’ liability insurance provides cover if a tenant or visitor seeks compensation for injury, or for damage to their possessions, at your rental property – you can choose between £2,000,000 and £5,000,000 of property owners’ liability cover.

Why do I need rent guarantee insurance?

Rental guarantee insurance means you won’t lose your rental income. Tenants can fall behind on the rent for various reasons, with negative consequences for both them and their landlord.

If you're renting out a property and your tenant doesn’t pay the rent, it can bring serious financial headaches. You could be relying on the rent for part of your income and you might also have a mortgage in place on the property that needs to be covered.

Non-payment could go on for months with thousands of pounds in rent arrears built up – repossession and eviction proceedings can be drawn out affairs. In these situations, landlords typically find themselves praying that their tenants will move out of the property of their own accord well before the process has run its course.

With the rental guarantee policies sold through Confused.com, you’ll also get your legal expenses covered and access to legal advice should you need to repossess your property and evict the tenants.

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What's not covered by rent guarantee insurance?

There’s certain things that rent guarantee insurance won’t cover:

  • Commercial properties
  • Selling the property
  • Certain types of tenant, such as students or the unemployed
  • Contract disputes
  • Tenants moving out
  • When you start the policy

Commercial properties, like offices or places of work, are not covered by rent guarantee insurance. However, by selecting commercial insurance in our quote process, you can add rental income protection to your policy.

Selling the property means your rent guarantee insurance payments will stop. The insurance will stop when you put the property on the market.

Certain types of tenant, such as students or the unemployed, will often not be covered by rent guarantee insurance as they’re viewed as being at higher risk of defaulting.

Contract disputes may not be included in the cover for legal expenses.

Tenants moving out means the rent guarantee insurance pay-outs will end. Including if the tenants leave voluntarily or are evicted. You won’t be covered while you find a new tenant.

When you start the policy may affect when you can claim. If you took out rent guarantee insurance before the tenancy agreement was signed, you’ll usually be unable to claim on the policy for 90 days. This varies between providers, so check before you buy.

How much is rent guarantee insurance?

The cost of rent guarantee insurance varies depending on certain factors:

  • Your property, including things like the size and location. Renting property in some areas is viewed as higher risk than others.
  • Your tenants can also impact the price. Some tenants are viewed as higher risk than others.
  • Levels of cover, the higher the amount of rent you need to cover, the higher the price is likely to be.

How do I get rent guarantee insurance?

When you get a quote through our site, we refer to rent guarantee insurance as tenant default insurance. You’ll be asked to give details about your property, including the:

  • Location.
  • Size, including the number of rooms.
  • Property type, is it a flat or house for example.

We’ll also ask you about the tenants who’ll be living at the property, including whether they’re employed/self employed, retired or students.

You’ll need to tell us whether you carry out background and identity checks on tenants as well as obtaining independent references and credit checks on tenants or their guarantor.

As well as performing checks on your tenants, you'll also need to include legal expenses cover to be able to add tenant default insurance to your quote.

You must have obtained satisfactory references for the tenant(s) at the beginning of the tenancy, otherwise your cover may be invalid. It’s also vital that your property is let with an assured shorthold tenancy, or if your property is located in Scotland, an assured tenancy.

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Is there an excess on rent guarantee insurance?

There’s no excess to pay on rent guarantee insurance bought through Confused.com.

Rent guarantee providers will often give you a choice of paying a higher price to remove the excess from the policy altogether.

Does it cover legal disputes with tenants?

Rent guarantee insurance can replace your lost rent, but legal expenses insurance can cover legal costs relating to your tenant and the tenancy.

If you buy landlord’s insurance through us, you’ll have to buy legal cover in order to get the rent guarantee policy.

Legal cover can also help cover fees for other tenant-related issues. For example, if the tenant has damaged your property.

Purchasing legal cover and rent guarantee insurance through Confused.com means you’ll also get access to a legal and tax advice helpline providing unlimited legal and tax advice on any issue in relation to letting out your property.

What our home insurance expert says

Rent guarantee insurance gives you a safety net if your tenant can’t pay their rent for any reason. It's worth adding it to your existing landlord insurance policy so you don’t lose out on income.
Jessica Willock home insurance expert signature

Jessica Willock

Home insurance product manager

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