Rent guarantee insurance pays the rent if a tenant stops paying, and usually funds the legal costs of eviction. For a landlord relying on that income, it protects the mortgage and cash flow.
What it covers
The policy replaces lost rent, often after a short waiting period, up to a limit and for a set number of months. Many policies include legal expenses to recover possession. Some require the tenancy to have been referenced and rent to be paid on time before the claim.
Exclusions to check
Cover may not apply if the tenant is a relative, if the rent is already in arrears at inception, or if paperwork such as deposit protection was not in order. Read the wording alongside our explainer on exclusions. Our guide to complaining explains what to do if a valid claim is declined.
Is it worth it
For a single let funded by a mortgage, a missed rent can be severe. Weigh the premium against the income at risk, and consider it alongside landlord liability and buildings cover.