Why I Will Never Be Without Landlord’s Rent Guarantee Insurance Again

I’ve been a landlord for many years, and I’ve weathered the inevitable few storms – but in 2024, I encountered what so many landlords face, a situation that tests even the most seasoned professional.

A tenant stopped paying. Refused to leave. And I knew the property was getting in a very poor state.

I won’t dwell on the details, but suffice to say it wasn’t a quick or easy resolution. But…I was in a safe place – both financially and emotionally – by having Rent Guarantee and Legal Expenses Insurance in place.

The cover that paid out – and kept paying

Across the course of the claim, the policy paid out several thousands of pounds:

• £6,512 in unpaid rent while the tenant was in the property until evicted, plus…
• £1,733 during the void period, after the tenant had finally left, plus…
• £980 deposit refunded to me, from the security deposit to cover dilapidations

In addition, I was spared a raft of direct costs that most landlords would otherwise be stuck with:

• Court filing fees and bailiff application costs – around £400
• Legal representation through possession proceedings – likely in the region of £1,200–£1,500
• Solicitor communications and document reviews – all covered

All of that was handled, efficiently and professionally. But here’s the real takeaway:

None of this would have happened if my documentation hadn’t been spot-on from the start.

If my documents weren’t watertight it could’ve sunk the claim

When the lawyers acting under the policy got in touch, they needed to see the full tenancy file. That meant tenancy agreement, deposit proof, prescribed information, gas safety certificate, EPC, EICR, How to Rent guide, Right to Rent checks, check-in inventory, and evidence of tenant signature throughout.

That’s a pretty comprehensive bundle (can every landlord lay their hands on this lot at the drop of a hat?). Thanks to our process at Northwood, I had that entire digital bundle – over 100 pages, the whole thing initialed, timestamped, and stored securely.

Total time elapsed to deliver the bundle to the lawyers – 15 minutes to retrieve and send. Impact on this landlord’s peace of mind – priceless.

No delays. No gaps. No anxiety.

Had anything been missing – or had I used a handshake agreement or any half-completed key document– the whole claim could have collapsed.

So yes, the insurance was essential. But it only worked because the paperwork stood up to scrutiny.

Why insure at all?

It’s a fair question – especially from fellow landlords. For years, I didn’t feel it was necessary. You might think that in running a letting agency myself I should surely be someone with a high degree of certainty that I’ve got great tenants. And on the whole I certainly do.

But I’ve seen the pressures mounting. Cost of living, frozen wages, and (let’s be honest) rising rents – we have to keep up with the market, any landlord’s costs are rising too. But overall tenants are feeling the squeeze. And while many are doing their best, it only takes one unexpected turn – or one tenant who decides the landlord can carry the load – and suddenly your cashflow, your mortgage cover, and your mental bandwidth are all at risk.

So a couple of years ago I took a considered judgement, and insured the lot. A Rent Guarantee and Legal Expenses policy was called for. Like any insurance, you’re always essentially paying against a risk you may never actually encounter; with landlord cost pressures it’s tempting to firmly deny it’s a burden you can afford.

But, look at that total recovery I made from a single property where a thoroughly referenced and previously reliably-paying tenant left me inexplicably in the lurch: around £11,000!

You’d only need a couple of such events in a single year and it’s not just all your hard-earned investment returns that are blown to smithereens, but maybe even your financial stability would be imperiled.

The risks are about to rise. Here comes the Renters Rights Bill.

To all of the above can be added the uncertainty to come with the Renters Rights Bill.

• The time it will take to get to Court – with Section 21 outlawed, a landlord facing arrears will have to use Section 8, meaning every case needs a hearing. The Courts are already overloaded – it’s currently around a year minimum to recover your property via Section 8. It’s going to get worse. How long can your finances cope with no rent coming in while the Court trundles into action?
• No rent in advance – the time-honoured protection of rent in advance that applies to some tenancies is also outlawed. Potentially great tenants with weak references (such as a high earner returning from overseas) could be refused a tenancy in favour of a lower – more exposed – earner.
• Pet insurance – the latest news is that the RRB will make it a landlord’s responsibility to pay for insurance to cover a tenant’s pet damage? Huh, I hear you say, how can that be? I honestly don’t know…

England v. India at Lords. ‘Fraid not…

It seems inevitable that the case for insurance is only getting stronger. What sort of value can you place on the peace of mind that around £3-400 a year brings? What’s that…less than maybe 80 cups of Starbucks coffee a year (other coffees are available…). Or, as I discovered the other day when trying to book a ticket for Lords, just one seat in the stands! Needless to say I’m not going…blast.

Final thought

This isn’t about scaremongering. It’s about realism.

Even well-run portfolios and experienced landlords need a safety net. And the best time to put one in place is before you need it.

This is my heartfelt recommendation: if you’re not currently protected, now’s the time to act.

And, absolutely crucially, if your current setup doesn’t ensure that every document is signed, sealed, stored and retrievable immediately, let’s talk.

Because when the moment comes, you’ll want to be able to do what I did: click a few buttons, send a watertight digital file, and let the protection do the rest.