Tenant default insurance is cover for a landlord when a tenant stops paying rent. Depending on the policy it pays some or all of the missing rent for a set period, and can come with legal expenses cover for the cost of evicting the tenant. It only pays if you met its conditions, especially the tenant referencing rules, before the tenancy began.
Looking for cover for this property?Tell us about it, including any subsidence, flooding or empty periods, and a broker will look for cover.
Is tenant default insurance the same as rent guarantee insurance?
The names overlap and are used loosely. Tenant default, rent protection and rent guarantee insurance all describe cover for unpaid rent. The difference is in what the policy actually does, not the label, so read the wording rather than relying on the name.
- Rent only cover pays arrears for a limited period but leaves you to fund any eviction yourself.
- Rent plus legal expenses cover pays arrears and the legal costs of recovering possession, through a solicitor the insurer appoints.
- Legal expenses only cover pays for eviction proceedings but not the lost rent.
Some letting agents also offer a guaranteed rent service, where the agent rather than an insurer promises to pay you. That is a contract with the agent, not insurance, and it depends on the agent staying solvent.
What does tenant default insurance pay?
Policies may pay a monthly amount equal to the rent, or a percentage of it, from the point the claim is accepted, up to a maximum number of months or a monetary cap. Policies differ on when payments start, whether there is an excess period of unpaid rent before cover begins, and whether they keep paying after the tenant leaves while you relet.
The points to check are:
- the maximum monthly amount and the maximum period
- whether rent is paid until vacant possession, or stops at a court order
- whether you must hand over any deposit or recovered arrears to the insurer
- whether damage, unpaid bills or reletting costs are included or excluded
- how quickly you must report arrears
The deposit still counts. Government guidance says you must protect a tenant’s deposit in a government backed scheme within 30 days of getting it, and that the deposit stays protected until any dispute is settled. Insurers may expect you to use the deposit toward arrears and may reduce a claim if you did not protect it properly.
Ask us for a quote
Tell us about the let and your tenant referencing, and we will look for cover for you. Call 01795 841 310 (Monday to Friday, 9am to 5pm) or send us your details.
★★★★★ Rated 4.9 out of 5 on Trustpilot from over 160 reviews
What referencing conditions do insurers set?
Referencing conditions are where claims can fail. A policy can require a reference from a referencing service for each tenant and any guarantor, completed before the tenancy begins, and the reference can have to include a previous landlord or agent reference, an employer or other income check, and a credit history check.
Two Financial Ombudsman decisions show how strictly these are applied. In one, the insurer declined a claim because the policy required an employer or other financial source check for each tenant and the landlords had not obtained one. The ombudsman did not uphold the complaint, finding that the landlords were in breach of the condition and that the missing check could have made a difference. In another, the insurer declined because it decided the reference showed the tenant could not afford the rent. The ombudsman upheld the landlord’s complaint, because the policy did not define a satisfactory reference and nothing in the terms referred to affordability.
Other rules apply to every landlord in England. You must check the right to rent of all tenants aged 18 and over before a new tenancy starts. You cannot charge the tenant for referencing, because it is not on the government’s list of permitted payments; you can take a holding deposit of up to 1 week’s rent while you carry out reference checks. Build referencing into your letting process so you can show the insurer exactly what was done and when.
What eviction legal costs can be covered?
Where legal expenses are included, the policy can pay solicitor’s fees, court fees and the cost of enforcement, for example bailiffs, up to a limit. The insurer may want to approve the claim and the solicitor before costs are run up, and to see that the case has reasonable prospects of success.
In England, government guidance says you start by giving the tenant a section 8 notice on form 3A. If the tenant does not leave by the date in the notice, you apply to the court for a possession order using forms N5 and N119, or through the online possession service where the claim is only about rent owed. Legal costs you pay yourself may be deductible against rental income; our guide to legal and professional fees for landlords explains the tax treatment.
How did the Renters’ Rights Act change rent arrears claims in England?
Government guidance for landlords says the main changes came into effect on 1 May 2026. You can no longer evict tenants using the section 21 process, and assured tenancies run on a rolling periodic basis with no end date. For rent arrears, the court has to grant a possession order on the serious arrears ground only if the tenant owes 3 months’ rent; below that, the court may let the tenant stay. Notice periods vary by ground and in many cases are 4 months, although some grounds are shorter.
You also cannot ask for or accept rent before the tenancy agreement is signed, and after signing you can ask for a maximum of 1 month’s rent in advance. For insurance, this means every arrears claim now runs through section 8, so check that your policy wording has been updated for the new grounds, and that its own conditions for starting a claim still fit the court rules.
| Topic | Rule or finding | Why it affects a claim |
|---|---|---|
| Referencing | Ombudsman upheld an insurer’s decline where a required income check was missing | Meet every referencing condition before the tenancy starts |
| Satisfactory reference | Ombudsman rejected a decline based on affordability where the terms did not mention it | Insurers must rely on what the policy actually says |
| Right to rent | Check all adults aged 18 and over before a new tenancy (England) | Part of a properly documented letting |
| Deposit | Protect within 30 days in a government backed scheme | Deposit may be applied to arrears |
| Rent in advance | Maximum 1 month after signing (England) | Affects how much cushion you hold |
| Possession for arrears | Section 21 ended 1 May 2026; court must grant possession only at 3 months’ rent owed | Arrears claims run through section 8 |
What drives the price of tenant default insurance?
We do not quote typical prices because they vary. The main factors are the monthly rent and the cover limit, whether legal expenses are included, the length of any excess period, the type of tenant and tenancy, the location, and whether you use a letting agent who handles referencing. Landlords with several properties can sometimes insure them under one policy. Our guide to what landlord insurance covers explains how this sits alongside buildings, contents and liability cover.
Example. Alex lets a flat in Leeds through an agent who completes a full reference on the tenant, including an employer check and credit check, before the tenancy is signed. The deposit is protected within the 30 days. Eight months later the tenant stops paying. Alex reports the arrears to the insurer within the deadline in the policy, the insurer appoints a solicitor to serve a section 8 notice, and the policy pays the monthly rent up to its limit while the possession claim goes through court.
Frequently asked questions
Can I buy tenant default insurance once the tenant is already in arrears?
It can be difficult. Insurers may want the tenancy to start with clean referencing and no arrears, and any problems known when you apply have to be disclosed. Check the conditions before applying mid tenancy.
Does tenant default insurance cover damage by the tenant?
Rent cover deals with unpaid rent. Malicious damage by tenants may be available under a landlord buildings or contents policy, depending on the wording.
Does it cover a guarantor who refuses to pay?
Policies that require guarantor referencing may expect you to pursue the guarantor first or pass your rights to the insurer. Read the claims conditions.
Is landlord tax investigation insurance the same thing?
No. Tax investigation insurance pays accountant’s fees if HMRC opens an enquiry into your rental income. Solar Protect’s cover pays up to £100,000 of accountant’s fees, has no excess and never pays tax, interest or penalties. See tax investigation insurance for landlords, or quote and buy online at our quote page.
Can Solar Protect help with rent protection cover?
We are an FCA authorised insurance broker. Tell us about the property, the tenancy and your referencing, and we will look for cover. Call 01795 841 310, Monday to Friday 9am to 5pm, or ask us for a quote.
More on property insurance. Ready for a price? Ask for a quote or call 01795 841 310.
Sources
- Financial Ombudsman Service: DRN 5722964
- Financial Ombudsman Service: DRN 4461456
- GOV.UK: Check tenant right to rent documents
- GOV.UK: Fees you can charge as part of a tenancy
- GOV.UK: Deposit protection schemes and landlords
- GOV.UK: Renters rights act an overview for landlords
- GOV.UK: Giving notice to evict tenants
- GOV.UK: Standard possession orders
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 November 2026. Solar Protect is the trading name of Solar Insurance Services (Medway) Limited, authorised and regulated by the Financial Conduct Authority. This page is general information, not personal advice.