Rent guarantee insurance

Start by checking whether you have legal expenses cover as part of your landlord insurance or rent guarantee policy. These covers often work together: rent guarantee typically won’t pay out unless legal action has begun, and legal expenses insurance helps cover the cost of that action.

What’s usually covered: • Recovering unpaid rent • Eviction and possession proceedings • Disputes linked to property damage

These costs are normally covered up to a fixed limit and you may need to use the insurer’s panel solicitor.

What’s not usually covered: • Disputes that began before your policy • Cases where tenants weren’t properly referenced • Issues excluded in the policy wording

If you don’t have cover or your situation falls outside the policy, you’ll need independent legal advice. To avoid future stress and costs, consider pairing rent guarantee and legal expenses cover, as they’re designed to work together.

Here is an outline of how it works to make a claim on your rental guarantee insurance:

• Tenant fails to pay the contracted monthly rent of £1,000 when it is due on 25 July

• Contact your insurer straight away and request a claim form – policies usually stipulate between 31 and 60 days – but the sooner, the better

• Contact your tenant and request unpaid rent in writing – and again 7 days later if not received. If you employ a letting agent, it will do this on your behalf

• If your tenant still fails to pay, you can start your claim – provided your policy has been in place for 90 days

• Assuming the excess payable is one month’s rent, you will start to receive the £1,000 payment from 25 August

• You can continue to claim on unpaid rent until the maximum number of months stated on the policy, your tenancy agreement ends or your tenant is evicted – whichever is soonest

• Your insurer may also pay legal expenses including court costs to obtain vacant possession up to a capped amount. Although the cover may have to be bought separately. Check your policy

To be eligible for rent guarantee cover, landlords usually must meet a few key requirements:

• Tenant references – from a previous landlord, letting agent, or employer, or a registered guarantor. Ensures the tenant is reliable.

• Credit checks – all tenants should be screened to show they can meet rental obligations.

• Tenancy agreement type – typically an Assured Shorthold Tenancy (AST) or other approved format. Confirms the legal basis for eviction if needed.

• Deposit protection – the tenant’s deposit must be secured in a government-approved scheme. Protects both landlord and tenant and supports claims if deductions are needed.

Failing to meet these criteria can invalidate your claim, so review your current tenant vetting process before applying for rent guarantee insurance.

Yes. Most insurers require that tenants are properly vetted before you can take out rent guarantee insurance.

Essential checks (usually mandatory for eligibility):

• Tenant references – from previous landlords, letting agents, or a guarantor.

• Credit checks – including any County Court Judgments (CCJs), bankruptcies, or Enforcement of Judgments Office records.

• Valid tenancy agreement – typically an Assured Shorthold Tenancy (AST) or approved equivalent.

• Recommended extras (may help reduce premiums and risk): • Employment verification • Criminal background checks • Proof of income

These checks not only determine eligibility for cover but can also influence your premium, with well-referenced tenants often resulting in lower costs.

Landlords should embed these checks into their standard referencing process. For more guidance, see our tenant referencing and background check resources.