Rent Guarantee Insurance

Oct 1, 2025 | Landlords, Property Management

The rental landscape for landlords as we enter the last quarter of 2025 is more challenging than ever before. With rising unemployment putting pressure on household budgets and legal reforms lengthening the time to resolve rent arrears and evictions, maintaining a reliable rental income has become a significant concern. Fortunately, Rent Guarantee Insurance (RGI) offers robust protection in this evolving environment, ensuring landlords aren’t left vulnerable when tenants struggle to pay.

A Tougher Market for Landlords

While the worries of the pandemic and furlough have faded, today’s market presents new hurdles. High unemployment continues to strain many households, and even reliable tenants may face unexpected job losses, leading to missed rent payments. For landlords, just a few months of rental arrears can put mortgage payments, maintenance costs, and overall investment returns at risk.

Add to this the effects of regulatory change – the Renters Reform Bill, for example, means landlords can no longer rely on Section 21 ‘no-fault’ evictions. Recovering possession of a property now requires proving specific grounds, such as significant rent arrears or tenancy breaches, and court hearings can stretch on for months thanks to system backlogs. This combination of factors increases both the likelihood of lost income and the costs involved in regaining possession.

What Is Rent Guarantee Insurance?

Rent Guarantee Insurance is designed to bridge the gap when tenants fail to pay rent. Rather than waiting months for a legal solution, the insurance provides steady rent payments while matters are resolved. Most policies provide:

  • Payment of outstanding rent for up to 12–15 months
  • Legal expenses cover, including court and solicitor’s fees needed to recover possession or chase arrears
  • Professional support and advice through challenging legal processes
  • No excess on claims, offering straightforward protection.

This practical support is increasingly crucial in an environment where late rent and court delays are common. For landlords managing just one or two investment properties, RGI can make the difference between stability and financial stress.

The Key Benefits of RGI for Landlords

1.Stable Cash Flow:
 Rental income can be the financial lifeblood for many landlords. With RGI, payments continue, even if a tenant defaults, so mortgages and bills can always be paid on time.

2. Risk Reduction:
With legal costs included, landlords avoid hefty solicitors’ fees in protracted eviction cases.

3. Professional Legal Support:
New and proposed housing laws and procedures are complex, but RGI providers offer the expertise and help landlords need to navigate them, from pre-action protocols to attending court hearings.

4. Speedier Re-letting:
Less time spent chasing arrears or fighting legal battles means landlords can get their properties back on the market much faster if tenants default.

What Landlords need to know

It’s essential to understand that most Rent Guarantee policies require landlords to complete thorough tenant referencing procedures. This generally includes, but isn’t limited to:

  • Income verification
  • Credit checks
  • Right-to-rent checks

Missing or inadequate referencing can void a claim. Additionally, most insurers set a short waiting period before they begin paying out – typically, once an arrears threshold has been reached.

Landlords should also note that RGI is specifically for tenant arrears and legal costs. Standard property insurance is still needed for issues such as fire, flooding, or accidental damage.

What’s the cost?

The cost of cover depends on your rent amount, for example:

  • Up to £750: £20 plus VAT per mont
  • £751 to £1000: £25 plus VAT per month
  • £1001 to £1500: £35 plus VAT per month
  • £1501 to £2000: £45 plus VAT per month
  • Over £2000: £55 plus VAT per month

The premium paid for RGI is a small price for the peace of mind it brings, compared to the potential loss of thousands in unpaid rent and legal costs. Whether managing a single property or a growing portfolio, every landlord should consider this vital safety net.

Why Rent Guarantee Insurance now?

Today, landlords are bearing more risk and facing more regulation than ever. The rent guarantee model offers the opportunity of practical security in a market where even the most stringent referencing and tenant selection can’t eliminate all uncertainty, especially with high unemployment and an ever-changing legal backdrop.

Looking for Advice and Support?

Navigating the world of Rent Guarantee Insurance and legal reforms can be complex. If you’re unsure which policy to choose, need assistance with tenant referencing, or want general support with your lettings, Urpad is here to help. Our expert team understands the pressures facing landlords right now and can offer tailored advice, support with tenancy management, and guidance to ensure you remain protected and compliant at every step.

For straightforward, honest advice on Rent Guarantee Insurance and help safeguarding your rental income, get in touch with Urpad today.