In an increasingly unpredictable PRS, the question isn't: 'Is rent guarantee insurance worth it?' It's 'Can you afford not to have it?'
Is rent guarantee insurance really worth it?
It’s a fair question, and it’s important to answer with the Renters’ Rights Bill looming.
Due to the proposed abolition of Section 21, evicting a tenant will become more complex, time-consuming, and expensive. Plus, with the legal system already creaking under pressure, delays will be longer and more common than ever.
As a result, landlords are becoming uncertain about how:
- They can reclaim their property, and how long it’ll take
- They’ll recover unpaid rent
- They’ll pay their mortgage
So the question isn’t just “Is rent guarantee insurance worth it?” It’s:
Can you afford not to have it?
When you choose a provider with a comprehensive policy, rent guarantee insurance doesn’t just allow you to help your landlords recover unpaid rent and legal expenses. It also allows you to unlock a new revenue stream and retain your clients.
In this guide, we’ll explore what rent guarantee insurance covers, the benefits it can deliver, and the importance of choosing the right policy.
- What is rent guarantee insurance?
- Pros and cons of rent guarantee insurance
- Is rent guarantee insurance worth it?
- How to save up to £27K with rent guarantee insurance
- Goodlord's Rent Protection and Legal Expenses Insurance
What is rent guarantee insurance?
Rent guarantee insurance protects you from the financial risk of tenants falling into arrears. These policies typically cover unpaid rent until:
- Tenants start repaying rent
- Tenants vacate the property
- The policy hits its payout limit
Many rent guarantee policies also cover legal expenses so you can take action against a tenant, such as applying for a court order, issuing a notice of eviction, or recovering the expenses incurred from damages.
Depending on the policy and provider, rent guarantee insurance could cover:
- Rent arrears for a defined number of months, often capped at 12 to 15 monthly payments
- Legal support to help regain possession of the property
- Expenses related to taking legal action against the tenant
- Property damage caused by the tenant
| Pros | Cons |
| Peace of mind - you're covered if tenants fall into arrears | Added expense - the bigger the portfolio, the higher the cost |
| Financial protection - avoid lost income and high legal costs | Most policies have a cap - providers may stop paying out after 12-15 months |
| Easier re-letting - expert mediation allows you to regain possession as efficiently as possible | Conditions and exclusions - claims rely on meeting specific terms |
Pros and cons of rent guarantee insurance
You don’t get into a car expecting to crash, but if you do, you’re glad you had your seatbelt on. Rent guarantee insurance works in the same way. Here are several reasons why it's worth considering 👇
Pros
1 - Peace of mind
Knowing that rental income and your fees are protected, even if the tenant falls into arrears, provides peace of mind to landlords and agents alike.
2 - Financial protection
When a tenant falls into arrears and remains in the property for months, it can quickly become expensive, considering the lost income and mounting legal costs. Rent guarantee insurance provides a safety net by paying monthly rent and covering legal fees.
3 - Easier re-letting
Evicting a tenant can be extremely complicated and time-consuming, and the upcoming abolition of Section 21 makes it even more so.
A robust rent guarantee policy doesn’t just cover missed rent; it also includes legal support to help landlords through the eviction process. This streamlined process means quicker repossession of the property, allowing you to get it back on the market sooner and with less hassle.
Cons
The main downsides of rent guarantees include the costs and limitations of the policies available.
1 - Added expense
While rent guarantee insurance can be affordable, landlords may not consider it a priority, especially if they haven’t previously experienced tenants falling into arrears. Costs can also reach thousands of pounds for landlords with larger portfolios.
But like servicing a car, a small, upfront cost can prevent a major breakdown later.
2 - Most policies have a cap
Most insurers cap their payments at 12 to 15 months. So if it takes longer than that to vacate a property, the payments will stop, even if the tenant remains.
That’s why it’s essential to check what the policy covers and whether payments continue until you achieve vacant possession — something that Goodlord provides.
3 - Conditions and exclusions
You must meet specific terms and conditions to make successful claims. For instance, the items must be listed in the tenancy agreement to receive a payout for damage caused by a tenant.
It’s also important that your landlord serves notices on time or takes the required steps before making a claim. If not, the policy may not pay out.
Is rent guarantee insurance worth it?
In short, yes. Rent guarantee insurance is the airbag you need when you and your clients hit a bump in the road. Here’s why 👇
For agents
1 - Win new landlords
Every agency markets itself as a reliable partner offering excellent services. But very few work with trusted partners who offer rent guarantees with legal support baked in.
By including it as part of your proposition, you show that you’re not “just another agent” and one that’s proactive, forward-thinking, and genuinely invested in protecting your clients’ investments.
2 - retain existing landlords
When you don't have rent guarantees in place, landlords don’t just lose money; they also lose confidence in:
- Tenants
- The market
- You, the agent
However, with a solid protection plan in place, you help landlords mitigate the risks they take on. This could be the difference between keeping a landlord in your managed book and losing them.
For landlords
Helping landlords understand the value of rent guarantees isn’t always easy, but the following factors will encourage them to press the accelerator and invest:
1 - The Renters' Rights Bill
Section 21 is the go-to option for landlords who need to regain possession of their property.
But that’s changing very soon.
When the Renters’ Rights Bill becomes effective, landlords must rely solely on Section 8 to evict a tenant. They must provide valid grounds for eviction, such as rent arrears, anti-social behaviour, or breach of the tenancy agreement terms.
This is a slow and painful process.
Because of court backlogs, arrears, and property dilapidation could last well over a year, making rent guarantee insurance essential.
After all, with a robust rent guarantee, landlords can protect their income and receive the legal support they need to recover their property.
2 - Increased pressure on tenants
According to Goodlord’s Rental Index, rents are up by 4.6% year-on-year.
With the average tenant spending a third of their income on rent, most households are experiencing a growing financial strain.
Plus, with recent job market shifts, industry-wide slowdowns, and global economic uncertainty, even the most reliable tenants could fall into arrears.
3 - Small cost, significant return
When a tenant falls into arrears, the knock-on effect can be immediate, especially for landlords who rely on that rent to cover their mortgage. A few missed payments, and suddenly it’s not just income at risk, it’s the property itself.
Your job is educating landlords on how little it takes to safeguard against that loss. Here’s a simple way to put it:
Spending the equivalent of one week’s rent on a rent guarantee will protect their income for the next 51 weeks.
That kind of benefit is hard to turn down.
"Other providers might pay out 12 months maximum, but evictions can take longer. We've had a couple of evictions recently which have unfortunately taken over a year, and some rent guarantee products would have stopped payouts by then Goodlord's product can now make sure that doesn't happen.” — James Conway, Director at David Conway Estate and Letting Agents
How to save up to £27K with rent guarantee insurance
I live and breathe rent guarantee insurance because I’ve seen the value Goodlord’s coverage delivers. Here’s what could’ve happened in three cases if landlords didn’t invest in protection 👇
Willesden County Court
At Willesden County Court, a landlord made a possession claim based on an expired Section 8 notice in August 2024. Despite the order being granted for November 2024, the tenant didn’t vacate.
The landlord requested a bailiff appointment shortly after, on 27 November 2024. Yet, as of 31 March 2025—more than seven months later—no eviction appointment has taken place.
Without rent protection, the landlord would have been responsible for the full amount, which now totals £26,950 in missed rent, plus legal fees.
Barnet County Court
At Barnet County Court, a landlord served a tenant with a Section 21 notice, which expired in December 2023. The landlord filed for possession proceedings in February 2024.
The court took over five months to grant the possession order, awarding it for July 2024, but the tenant still didn’t leave.
It wasn’t until January 2025 that a bailiff appointment was finally secured, taking 11 months to recover possession. Had the tenant stopped paying rent, the claim would have cost around £16,250 in rent protection alone.
Stratford Housing Centre
A landlord served a Section 8 notice for rent arrears in July 2024, with a hearing scheduled for December 2024. Although the courts granted possession, the tenant didn’t vacate.
Then came the next hurdle:
The court delayed sending out the official possession order, which meant the eviction couldn’t be processed.
Given the backlog at Stratford, Goodlord had to escalate and secure a High Court enforcement, which was finally booked for 25 March 2025.
It took 8 months from the initial notice to secure possession. Goodlord paid £15,200 in rent protection, plus all the associated legal expenses.
Goodlord's Rent Protection & Legal Expenses Insurance
Rent guarantee insurance protects your income, helping you to support your landlords and stand out in a competitive market.
But you also need to be mindful of what product you're offering. Because while many policies are called “rent guarantee insurance,” the reality is:
There’s often no guarantee at all.
That’s why, at Goodlord, we don’t use the term “guarantee”. Instead, we call it Rent Protection and Legal Expenses Insurance.
Insurance, by nature, comes with terms and conditions, and we don’t believe in using language that suggests otherwise.
Here's exactly what our package includes:
- Rent protection - Protection if the tenant doesn’t pay their rent until vacant possession is achieved.
- Rent recovery - We’ll pursue tenants on your behalf to recover outstanding rent from them.
- Payment after vacant possession - Payment of 90% of rent for up to 6 weeks after vacant possession has been obtained
- Handle the eviction process - Tenants who can’t meet their tenancy agreement requirements or squatters living in your landlord’s property without their consent will be evicted, and we’ll manage the legal proceedings.
- Property damage - Legal cover to pursue tenants for damage to the property of more than £1,000. Plus, we pay up to £250 when the tenant causes damage to the property above and beyond the deposit amount.
- £100,000 limit of indemnity - The total amount payable in the event of a claim.
- Contract disputes - Cost and expenses for a dispute with a party with whom you have a direct contractual relationship.
- Alternative accommodation and storage costs - If your landlord needs to move back into the property once vacant possession has been gained, we will pay for their alternative accommodation and storage costs for up to 30 days.
To make sure you’re in the driver’s seat, book a call with us today 👇
Additional insights from Head of Claims, Leanne McCarthy, and Managing Director of Insurance, Oli Sherlock. This article is intended as a guide only and does not constitute legal advice. For more information, visit gov.uk.
