Rent Guarantee Insurance for Landlords - Do You Actually Need It?

Published: July 2026 | Reading time: 9 minutes | Category: Landlord Finance

Eviction is now slower. A lot slower. The average landlord loses £12,708 in unpaid rent while waiting to regain possession of their property – and that figure, from the High Court Enforcement Officers Association (HCEOA), was calculated before Section 21 was abolished and the courts had to absorb the full weight of the new system. Rent guarantee insurance costs around £300 a year. You can do the maths yourself.

But the honest answer is not ‘every landlord needs this.’ It is more useful than that. Here is what the cover actually does, what has changed in the small print since May 2026, and a straight answer on whether you specifically need it.

Key takeaways (read this first)

£300 a year. £12,708 average rent loss during a contested eviction (HCEOA, 2025). The maths does the rest.
Sales of rent guarantee and legal expenses insurance have risen sharply since the start of 2026. Landlords who have done the sums are buying it.
At least one major insurer has already removed the 12-month payout cap. Your existing policy may not have caught up – check it.
You can only add this cover at your buildings insurance renewal – not when a problem emerges. Check your renewal date today.
Most mortgaged landlords with a single property should have this. If you own outright with strong cash reserves, you might not need it. This article tells you which you are.

Important: This article covers England only

The Renters’ Rights Act – and everything in this article – applies to England only. Scotland abolished no-fault evictions in December 2017 under the Private Residential Tenancy framework. Wales replaced Section 21 with Section 173 notices under the Renting Homes (Wales) Act in December 2022. Northern Ireland operates a separate system entirely. If you let property outside England, the guidance here does not apply to you.

Why May 2026 changed the financial risk calculation

Under the old system, if a tenant stopped paying rent and refused to leave, you had a fallback: the Section 21 notice – your no-fault eviction route. It was not fast, but it was relatively predictable. Serve the notice, wait the period, apply to court, get possession.

That route closed on 1st May 2026. Section 21 is gone.

Now every eviction goes through Section 8 – the fault-based process – which requires you to prove a specific legal ground for repossession. Rent arrears is the most common ground, but to use the mandatory version (which gives you the strongest case), your tenant must be at least three months in arrears, up from two months under the old rules.

That means by the time you can file the strongest possible claim, you have already lost a quarter’s rent. Then you wait for a court date. According to the Ministry of Justice, the median time from issuing a possession claim to regaining possession was 26.4 weeks in the first quarter of 2026 – and that is before the full weight of the new system has been felt. That figure covers the court stage only; the notice period of up to four months comes before it. Contested or complex cases routinely run to nine to fourteen months or longer. During that entire period, the rent is not being paid – and it is your mortgage that keeps leaving your account every month regardless.

This is not scaremongering. It is arithmetic. And it is the reason that sales of rent guarantee and legal expenses insurance have risen sharply – enquiries to specialist landlord insurers have more than doubled since May 2026, with the NRLA reporting that landlords are increasingly treating this cover as essential rather than optional.

What rent guarantee insurance actually covers - and what it does not

The name covers two products that are often bundled together but are worth understanding separately.

Rent guarantee insurance

This pays out the rent when your tenant stops paying. Once you have made a valid claim, the insurer covers your rental income while the possession case works its way through the courts. Historically, most policies capped this at 12 months. That cap is changing – more on that below.

Legal expenses insurance

This covers your solicitor’s fees and court costs during an eviction. A contested Section 8 case – one where the tenant disputes the grounds – can cost thousands in legal fees before you have recovered a penny in rent. Legal expenses cover means those costs do not come out of your pocket.

The two are usually sold together as an add-on to your standard landlord buildings insurance policy. If you do not have buildings insurance, or if you bought it without the add-on, you may have neither.

What is not covered – read this before you assume you are protected

Exclusions are where policies bite landlords who have not read the small print. Common exclusions across most policies:

Arrears that existed before you took out the policy. You cannot buy this cover after a problem has started.
Tenants who were not properly referenced at the start of the tenancy. Most policies require a credit check and employment or income verification. A handshake agreement with someone you know personally is not enough.
Tenancies in breach of your mortgage terms. If your buy-to-let mortgage prohibits certain tenant types and you have ignored that, a claim may be refused.
Properties with outstanding licensing requirements. If your property requires a selective or HMO licence and you do not have one, a claim related to that property may not be valid.

The policy change you need to know about right now

Here is the most practically important thing in this article, and it is buried in the small print of your existing policy.

Until recently, most rent guarantee policies had a 12-month indemnity cap. That means the insurer would cover your rent for up to 12 months – and then stop, regardless of whether you had regained possession. In a world where Section 21 existed as a backstop, that was arguably manageable. You had a faster route to fall back on.

That world is gone. A contested Section 8 case can now run well beyond 12 months. At least one major insurer has responded by removing the cap entirely from its rent guarantee policy – cover now continues until you regain possession of the property. That is a significant change.

Not all insurers have followed. If your existing policy has a 12-month cap and your case runs to 14, 16, or 18 months, you are personally covering the shortfall. Before you assume your policy is adequate, check the terms specifically for the indemnity period.

Six questions to ask your insurer or broker today

Do not wait until you have a problem. Pull out your policy document – or call your broker – and get answers to these six questions:

Does my policy include rent guarantee cover, legal expenses cover, or both – or do I need to add them?
Is there a cap on how long the rent guarantee pays out – and if so, what is it? Has that cap been updated since May 2026?
What referencing standard does the policy require for claims to be valid? Do my current tenancy agreements meet that standard?
Does the legal expenses cover include Section 8 proceedings in full – including any First-tier Tribunal hearing (the independent panel that reviews rent disputes)?
If my property is currently empty or between tenancies, does my policy include squatter and malicious damage cover? That is a separate product and not automatically included.
When does my buildings insurance renew? This matters – see the next section.

Do you actually need this - the honest answer

Not every landlord needs rent guarantee insurance. Here is a straight assessment.

You almost certainly should have it if:

You have a mortgage on the property. If the rent stops and the mortgage does not, your own money fills the gap every single month. The £12,708 average loss figure assumes a typical contested case. Your mortgage alone could run to £8,000-10,000 of that over a year.
Rental income is your primary or significant secondary income. If losing six months’ rent would materially affect your financial position, this is not optional.
You have a single property. Portfolio landlords can spread risk across multiple properties. You cannot.
Your tenant was not professionally referenced. If you let to a friend, a family member, or someone without a formal credit and income check, you may already be outside the terms of a future claim – but fixing the referencing process for your next tenancy matters.

You might reasonably decide against it if:

You own the property outright with no mortgage and hold strong cash reserves – enough to cover 12-18 months of void rental income without material hardship.
You have a large portfolio and self-insure across it. This is a business decision, not a personal finance one, and you likely already have advice on it.
You have a long-standing tenant with a flawless payment history and no current cause for concern. This reduces – but does not eliminate – risk. Circumstances change.

The honest position: if you have a mortgage and you are managing one or two properties, the premium is modest relative to the exposure. Most landlords in that position should have this cover.

The renewal problem - why you cannot leave this until later

If your rent guarantee and legal expenses cover is sold as an add-on to your buildings insurance – which is how most policies work – you can only buy it or upgrade it at renewal.

You cannot add it mid-policy when a problem is already developing. The insurer will not take on a risk that is already live.

Important:

Landlords whose renewal is several months away are currently unprotected – not because the cover does not exist, but because they have not checked. Check your renewal date now. If it is more than a month away and you currently have no rent guarantee or legal expenses cover, ask your broker whether a standalone policy is available in the interim. Some are. Not all.

What to do - in this order

Find your landlord insurance policy document today – not when something goes wrong. If you cannot locate it, call your insurer or broker and ask them to confirm your current cover in writing.
Check specifically whether rent guarantee cover and legal expenses cover are included. If they are, check the indemnity period – flag anything with a 12-month cap and ask whether updated terms are available.
Note your buildings insurance renewal date. This is when you can add or upgrade cover. Put it in your diary three weeks before renewal so you have time to shop around.
If your renewal is more than a month away and you have no rent guarantee cover, ask your broker whether a standalone policy is available now. Ask specifically about the indemnity period and the referencing requirements.
Check your tenancy referencing records. Most policies require a credit check and income or employment verification for claims to be valid. If your current tenancies do not meet that standard, get advice from a specialist landlord solicitor before you need to make a claim.
If you have a property currently empty or between tenancies, ask specifically about squatter cover and malicious damage cover. These are separate products and not automatically included in standard buildings insurance.
Use a comparison tool or speak to a specialist landlord insurance broker – not a generalist insurer – to compare like-for-like policies. Focus on the indemnity period, referencing requirements, and what is excluded, not just the headline premium.

This article is guidance only and not formal legal or regulated financial advice. Insurance products and their terms vary. For complex situations, consult a specialist landlord solicitor or FCA-regulated insurance broker before making decisions.

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A NOTE ON THIS ARTICLE

This article is guidance only and not formal legal advice. The Landlord Brief aims to translate complex legislation into plain English – but every landlord’s situation is different.

If you have tenants in rent arrears, a possession case in progress, or a complex tenancy arrangement, we strongly recommend speaking to a specialist landlord solicitor before acting.