If you are a landlord in today’s changing market, you will know how important it is to protect your property and your rental income. With the upcoming reforms shaking up the private rental sector, you might be asking Should I stick with traditional landlord insurance? Or is it smarter to go for a rent guarantee policy instead? Both options have their own strengths, but they are not the same. Choosing the right one could save you a lot of stress and money in the long run.
What is traditional landlord insurance?
Traditional landlord insurance is the standard cover that most landlords are familiar with. You can think of it as your safety net for physical property. It covers building insurance protection against fire, flood, storm damage or vandalism. Content insurance if you provide furniture or appliances that are covered for dinner. Liability covers include protection from claims if a tenant or a visitor gets injured on your property. Loss of rent is sometimes included if the property becomes uninhabitable due to a major event like fire.
What is rent guarantee insurance?
Rent guarantee insurance is designed to protect your income, not the building. It covers missed rent payments if a tenant stops paying the insurer covers the rent. If you need to take tenants to court to recover arrears or regain possession, then your legal expenses are covered. Eviction costs support for bailiff court orders or even legal representation. Some policies even cover void periods, a gap between tenants, though this is less common.
Why is this debate important post-reform?
The UK rental sector is facing major reforms with the upcoming Renters’ Reform Bill. This includes the abolition of Section 21 no-fault evictions which will make it more challenging to remove tenants quickly.
With stricter licensing and compliance rules, councils are cracking down harder on landlords. Rising tenant arrears, driven by the cost-of-living crisis, mean more tenants are struggling to pay on time. For landlords, this results in longer eviction processes, higher legal costs, and more difficulty recovering missed rent.
That’s why rent guarantee insurance has become increasingly popular but is it always better than traditional landlord insurance?
Rent guarantee versus traditional landlord insurance.
| Feature | Traditional Landlord Insurance | Rent Guarantee Insurance |
| Covers property damage? | Yes | No |
| Covers contents (furnished lets)? | Yes | No |
| Covers tenant non-payment? | No | Yes |
| Covers eviction legal costs? | Usually not | Yes |
| Protects rental income? | Limited (only in specific cases) | Yes |
| Legal requirement? | Often required by mortgage lenders | No, but strongly recommended |
| Typical cost per year | £150 – £350 | £200 – £500 |
| Main benefit | Protects the property | Protects your income |
Which type of insurance do you really need?
The answer is that both serve different purposes. If you only have traditional landlord insurance, or property is protected from fire or flood but you could even lose months of rent if a tenant defaults. If you only have a rent guarantee, insurance income is safe, but if the property burns down, you are just left with a huge repair bill. The best protection is always a combination of both.
Need help choosing the right cover?
At Mortoo Homes, we work with London landlords every day to navigate licensing complications and insurance. We can help you understand which cover suits your property and set a rent guarantee scheme that is suitable for you. We can also manage compliance with new reforms and keep your rental income secure. Just email us today, and we will guide you through options and help you protect your investment and enjoy stress-free property management.