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Rent Guarantee Insurance – “dead money” or invaluable peace of mind?

May 24, 2022

Can you cope financially if your tenants default on their rent?

With inflation running at the highest level for 40 years and the cost of living crisis deepening, these are challenging times for landlords and tenants alike.

Landlords may already feel protected by their letting agents’ rigorous vetting processes and deposit schemes – or tenants may come with a guarantor.

There’s also the ultimate sanction of initiating eviction* proceedings but there’s a strict legal process to follow and it won’t be quick.

That’s not good news for anyone with fixed overheads and/or mortgage payments to cover every month.

So, what are the options? An increasing popular choice is Rent Guarantee Insurance, that covers landlords’ monthly income if tenants fail to pay.

Under the terms of Financial Services’ Authority regulations, Town & Country Property Services are are not licensed to sell these products.

Therefore, it’s essential that you obtain your own professional advice.

However it’s fair to say these policies can be worth looking at in these uncertain times, simply for financial peace of mind.

As with all insurance policies you may never claim and premiums end up as “dead money” but that can be a small price to pay for the sense of security.

As always, take time to read and understand the policy – and check the small print. Typically insurance companies offer insurance cover lasting the length of the tenancy agreement, generally six to 12 months.

Keep a careful eye out for conditions, limitations and exclusions to avoid those frustrating situations where you think you’re covered but you are not. A good example, is a 90-day period from signing up, before you can claim.

Shop around for competitive quotes via insurance comparison site – or we can put you in touch with a broker.

Premium prices are calculated in the usual way, dependent on property type and size, amount of rental income and whether you want “extras” such as help with legal costs in the event of a dispute.

To qualify, most insurers require evidence that you have a legally-binding tenancy agreement and that references, deposits and credit checks on tenants are in place.

Interested? Do take independent advice and weigh up all options. We are always very happy to discuss, but ultimately, the decision is yours.

*If you think eviction is the ultimate answer, please speak to your lettings agent asap or access the Government website for an overview of the law: Evicting tenants (England and Wales): Overview – GOV.UK (

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