Rent guarantee insurance: what it covers and when it is worth it

What it is

Rent guarantee insurance (RGI) is a policy a landlord buys to cover rent the tenant does not pay. Most policies also include legal expenses cover for getting the home back through the courts.

Is it a legal requirement?

No. No law in England requires rent guarantee insurance, or any landlord insurance. Your mortgage lender may require buildings insurance, and a leasehold flat is usually insured by the freeholder.

What policies usually ask for

• Referencing before the tenancy starts: a credit check, income or affordability, and often a previous landlord's reference. Some policies accept a guarantor where the tenant does not pass alone.
• Telling the insurer quickly when the tenant falls behind, often within a set number of days.
• The right paperwork: a protected deposit, the gas and electrical certificates, the EPC and the written statement of terms. A missing document can stop a claim.

What it usually covers

• the rent after a waiting period of arrears, up to a monthly limit and for a number of months;
• legal costs for a possession claim on a valid ground;
• sometimes a share of the rent while the case goes through court.

Every policy is different: read the limits, the excess and the exclusions.

What to check under the Renters' Rights Act

Since 1 May 2026 every tenancy is periodic and possession is by section 8 grounds only. Check that your policy:

• covers assured periodic tenancies (older policies were written for fixed terms);
• works with the section 8 arrears grounds (Ground 8 needs at least three months' rent owing);
• does not depend on taking more than one month's rent in advance, which is no longer allowed.

Who pays

The landlord. Under the Tenant Fees Act 2019 you cannot charge the tenant for the insurance or for the referencing it needs.

This guide is general guidance for England, not financial advice. Compare policies, or ask an insurance broker.