How important is rent guarantee insurance for landlords?

For many landlords, the idea of rent guarantee insurance might seem like an unnecessary added cost—until the unexpected happens. Just like any other form of insurance, you take it out hoping you’ll never need it. But if and when you do, it could save you from serious financial stress.

In this blog, we’re sharing a real-life example that highlights just how crucial rent guarantee insurance can be—and why every landlord should strongly consider it.

A real story: when rent guarantee insurance saved a landlord’s investment

This story involves a landlord we know personally (though not one of our clients). With two mortgaged properties—their own home and a rental property intended to fund their retirement—they relied on rental income to meet monthly commitments.

The tenant they accepted seemed ideal. A working professional, he passed all referencing checks, paid the deposit and first month's rent in full, and moved in without issue. But just weeks later, he stopped paying rent. Worse still, he became uncontactable, leaving the landlords with limited options.

They were forced to begin the eviction process—a legal journey that took over 6 months. During that time, they lost over £8,000 in unpaid rent, plus incurred legal costs, bailiff fees, locksmith charges, and a long void period.

Most landlords simply don’t have the financial buffer to absorb losses of this scale. It could have meant selling the property, and with it, their long-term financial plan.

The game changer: rent guarantee insurance

Fortunately, these landlords had taken out rent guarantee insurance at the beginning of the tenancy. In fact, they almost cancelled it after having good luck with previous tenants.

The policy covered almost £10,000 in total losses, including missed rent, legal expenses, and a contribution toward the void period. Thanks to this protection, they were able to recover financially and later secured new tenants who are now looking after the home.

This situation is not unique. Even the most reliable tenants can fall into hardship, particularly in today’s uncertain economy. Job losses, health issues, or family changes can all affect a tenant’s ability to pay rent—often with little warning.

So, how important is rent guarantee insurance for landlords?

Very. Whether you're a first-time landlord or have a growing portfolio, rent guarantee insurance is one of the smartest safeguards you can put in place. Here’s why:

• Peace of mind – You’re covered if the tenant defaults on rent.

• Legal support – Most policies include legal assistance for eviction proceedings.

• Financial stability – Maintains cash flow while protecting your long-term investment.

What to look for in a policy

Not all rent guarantee insurance policies are created equal. If you’re sourcing your own, be sure to check:

• When the payout kicks in (some policies have long waiting periods)

• What legal expenses are covered

• How long rent is covered for (typically 6–12 months)

• Whether void periods between tenants are included

Want to know how our cover works?

At Hawthorn & Co, we offer landlords a comprehensive rent guarantee option, with clear terms and fast claims support. If you’re already working with another agent or managing the property yourself, we’re happy to offer advice on what to look for.

📞 Call us on 01926 919553 or 📧 email enquiries@hawthornandco.co.uk to find out how you can protect your rental income and avoid a financial headache down the line.