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Ross Fowler tackles the question: What is a rent guarantee and is it worth it?

Blog post   •   Jun 25, 2014 14:00 BST

For his first blog post the Lettings Manager at Kentish Town, Ross Fowler, answers the question: What is a rent guarantee and is it worth it?


Being a landlord is not straightforward. There are various legislative and legal hoops to jump through, appropriate tenants need to be found, maintenance of the property - the list goes on...  Rent guarantee insures the landlord against loss of rent, primarily for a default by the tenants. Much the same as insuring a car, the policy will cover a certain time period and will pay out any costs less the excess, which is usually one month’s rent. Costs may also include the landlord’s legal defence, criminal prosecution defence, property dispute costs and loss of rent following insurance perils. Certain criteria will need to be fulfilled in order to take out a valid policy – this will often include references and credit checks for the tenants, a tenancy agreement, inventory and a security deposit.

Is it worth it? If you have ever experienced tenants that do not pay rent, 100%, yes. We routinely insure items of much lesser value such as mobile phones, cars and the contents of your home, so why wouldn’t you? Many landlords choose not to take out rent guarantee policies. It is a decision taken based on a number of factors – their personal experience of tenants in the past, the advice given by the estate agent once the background checks have been carried out or the target market i.e. students or professionals. It is a good method of mitigating some of the risks and potential costs associated with being a landlord.

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