Why it matters
What Rent Guarantee Insurance means for a landlord
With Section 21 gone and possession now running through Section 8, a process that can take many months, rent guarantee insurance has become a more attractive hedge against the biggest single risk in letting: a non-paying tenant you cannot quickly remove. The catch is the conditions: a claim can be refused if the tenant was not referenced to the insurer’s standard or if compliance paperwork was defective, so the policy only protects a well-run let. Weigh the annual premium against the realistic cost of arrears plus a multi-month possession claim.
Worked example
How it plays out
Tom pays £250 a year for rent guarantee and legal-expenses cover on a £1,200-a-month let. His tenant stops paying and, because Section 21 is gone, possession through Section 8 takes seven months. The policy pays the rent up to its monthly cap and month limit and covers the legal costs of the claim, roughly £8,400 in rent plus about £1,500 in legal fees Tom would otherwise have carried himself. The condition that made it pay out: the tenant had passed referencing to the insurer’s standard and the tenancy was fully compliant. A defective gas certificate or an un-referenced tenant could have voided the whole claim.
Common mistakes
Where landlords go wrong
- 01Assuming any tenant is covered, cover usually requires referencing to the insurer’s standard.
- 02A compliance defect (missing gas certificate, unprotected deposit) can void the claim.
- 03Overlooking the monthly cap and the maximum number of months the policy will pay.
What to do
A short checklist
- Reference every tenant to the insurer’s required standard before the tenancy starts.
- Keep the compliance pack complete (gas, EICR, deposit protection, prescribed information).
- Check the monthly cap and month limit match your rent and a realistic possession timeline.
Sources
Checked against these sources on 16 September 2026. A guide to the rules in England, not legal advice: for a dispute or a possession claim, speak to a solicitor.
