What is rent guarantee insurance?
Also known as rent protection or tenant default insurance, RGI protects landlords from financial loss if their tenants fail to pay rent. It also covers legal costs for eviction, serving notices, and providing legal advice on other matters associated with being a landlord.
Impact of the Renters’ Rights Act
Under the new legislation, landlords will no longer be able to evict tenants using Section 21 notices. Instead, they will need to rely on fault-based grounds under Section 8 once the reforms take effect. While the Act aims to provide greater security for tenants, it introduces longer and potentially more complex eviction processes for landlords. This increases the risk of income disruption if a tenant fails to pay rent.
Why rent guarantee insurance matters
Rent guarantee insurance ensures landlords still receive rent payments even if tenants’ default, protecting the agents’ management fee. The extended eviction process under Section 8 can be costly and time-consuming; RGI undertakes the legal proceedings associated with regaining possession of the property, including issuing the relevant notices – leaving agents free to focus on their other management responsibilities.
Benefits of rent guarantee insurance:
- Stable cash flow: RGI ensures landlords continue to receive rent payments, even if tenants default, protecting the agents’ management fee and income.
- Legal expenses cover: Covers legal costs related to eviction proceedings, reducing financial burdens for landlords and the agents’ administration burden.
- Reduced vacancy risks: With the protection of RGI, landlords may feel more secure considering a wider pool of potential tenants, reducing vacancy rates.
With the Renters’ Rights Act bringing widespread changes to the private rental sector and removing no-fault evictions, landlords face greater uncertainty when tenants fall into arrears. Rent guarantee insurance provides confidence and continuity - covering missed rent, legal costs, and lengthy repossession proceedings - so landlords and agents can focus on maintaining strong relationships and stable portfolios.
To find out more about rent guarantee insurance and how it can support your agency, contact the Alan Boswell Group team on 01603 649727.
Alan Boswell Group: Property insurance
Alan Boswell Group has been protecting landlords and their investments for over 40 years with award-winning insurance products. By partnering with us, you can rest assured your clients receive the highest quality cover and service, while you benefit from an additional income stream.
