LANDLORD GUIDE
Loss of rent vs rent guarantee
Two covers, similar names, completely different triggers. One responds to damage, the other to a tenant who stops paying. Landlords who assume they have both often have neither.
Last reviewed August 2026
Loss of rent: damage stops the income
Loss of rent is normally part of a landlord buildings policy. If an insured event such as a fire, escape of water or storm damage makes the property unfit to live in, this section covers the rent you lose while repairs happen, and often the cost of housing the tenant elsewhere.
The trigger is always an insured claim on the property. No damage, no payout, however genuine the lost income.
Rent guarantee: the tenant stops paying
Rent guarantee, sometimes sold as tenant default cover, responds when the tenant is in arrears. Policies typically pay the rent for a defined period and may include the legal costs of recovering possession.
It is usually an optional add-on or a standalone product, and it is far more conditional than the rest of a landlord policy.
- The tenant normally has to have passed referencing before the tenancy started
- A written tenancy agreement in the insurer's accepted form
- Deposit handled correctly and protected where required
- Arrears reported to the insurer within a set number of days
- Legal process followed and notices served properly
Where landlords get caught out
The most common misunderstanding is assuming loss of rent covers arrears. It does not. The second is buying rent guarantee after a tenant is already behind, which insurers will not accept because the loss has already started.
The third is the period limit. If a serious escape of water takes five months to put right and the loss of rent limit runs for three, the last two months are yours.
How to size the cover
Work backwards from a worst realistic case. How long would a full reinstatement take on your property, including drying, insurer inspections and trades availability? Then check the loss of rent limit is at least that long at your actual monthly rent.
For portfolios, remember the limit generally applies per property, so it is the individual unit's rent and repair timeline that matters.
What to have ready
A specialist can confirm both covers quickly with these details.
- Monthly rent per property and the tenancy type
- Whether tenants were referenced and by whom
- Buildings sum insured and current loss of rent limit, if you have a schedule
- Any arrears history in the last three years
- Your renewal date
Check what your policy actually includes
Answer three questions in about 60 seconds and a UK insurance specialist calls you back to go through your cover. No obligation.
Request my callback →Common questions
- What is the difference between loss of rent and rent guarantee?
- Loss of rent forms part of a landlord buildings policy and responds when insured damage, such as fire or flood, makes the property uninhabitable. Rent guarantee is a separate product that responds when a tenant stops paying rent.
- Does landlord insurance cover a tenant who won't pay?
- Standard landlord insurance does not. Unpaid rent is a tenant default, not property damage, so it needs rent guarantee or tenant default cover added deliberately.
- How long does loss of rent pay for?
- It is usually limited by both an amount and a period, commonly expressed as a percentage of the buildings sum insured or a set number of months. The limit needs to be long enough to cover a realistic repair timeline.
- What do insurers require before rent guarantee applies?
- Typically a referenced tenant, a valid tenancy agreement and correctly served paperwork. Conditions vary by insurer, so the requirements matter as much as the cover itself.
Keep reading
General information only, written for UK readers. It is not insurance advice and does not take account of your circumstances. Cover Sorted collects your enquiry and passes it to an FCA-authorised insurance specialist. Cover Sorted does not provide quotations, comparisons or recommendations.