The Renters’ Rights Act has sparked widespread discussion around rent guarantee insurance, with many landlords understandably concerned about the impact of longer possession processes and increased risks to rental income.
However, while rent protection has dominated the headlines, the Act is also changing the wider landlord insurance landscape. As the risk profile of residential letting evolves, landlords should be reviewing not only their rent guarantee arrangements but also whether their broader buy-to-let insurance remains fit for purpose.
A Changing Risk Landscape
One of the biggest insurance challenges arising from the Act is the increased difficulty, time and cost involved in regaining possession when a tenancy goes wrong.
Industry figures suggest the median time to secure possession has risen to around 27 weeks, leaving landlords potentially facing several months of lost rental income before possession proceedings can even begin. Ongoing court delays can further extend this period.
This creates significant implications for both landlords and insurers. Longer possession timelines can result in larger rent arrears claims, increased legal expenses and a greater likelihood of disputes escalating. As a result, insurance products designed around previous possession timescales may no longer provide sufficient protection.
What Fit-for-Purpose Rent Guarantee Cover Looks Like Today
Traditionally, many rent guarantee policies have provided around six months of cover. In the current environment, that may no longer be adequate.
As possession timelines lengthen, landlords should consider products offering a choice of 6, 12 or 18 months’ protection, helping to ensure cover remains in place until claims are fully resolved. A small number of providers, including Insure My, have introduced 18-month options in response to the changing realities faced by landlords.
The excess period is also becoming increasingly important. Policies with a low or no excess can provide faster access to rental income protection when tenants fall into arrears, helping to reduce financial pressure.
Strong legal expenses cover should be another key consideration. As landlord-tenant disputes become more complex and costly, comprehensive legal expenses protection is no longer a nice-to-have—it’s an essential feature. Landlords should review policy wordings carefully, as the quality and scope of cover can vary significantly between providers.
The Wider Buy-to-Let Insurance Question
The Renters’ Rights Act should also prompt landlords to review their broader buy-to-let insurance arrangements.
Many policies have been renewed year after year with little reassessment, despite substantial changes to both the regulatory environment and the claims landscape. Landlords should ensure their policies continue to provide appropriate protection against today’s risks, including legal expenses, landlord liability and malicious or accidental damage caused by tenants.
Importantly, rent guarantee insurance and buy-to-let insurance should not be viewed in isolation. Together, they form a vital part of protecting rental income and safeguarding a long-term property investment.
Five Questions Every Landlord Should Ask at Renewal
When reviewing insurance cover, landlords should ask:
1. Does my rent guarantee cover reflect current possession timescales?
Could my cover expire before possession is ultimately achieved?
2. What excess period applies?
How quickly would rental income protection begin if a tenant fell into arrears?
3. How much legal expenses cover is included?
Would it be sufficient if a dispute became protracted or reached court?
4. Has my buy-to-let insurance been reviewed to reflect today’s rental market?
Does it still provide the level of protection I need?
5. Are there any conditions or exclusions that could affect a claim?
For example, are there specific requirements relating to tenant referencing, affordability checks or arrears reporting?
Preparation Is the Best Protection
The Renters’ Rights Act represents one of the most significant changes to the private rented sector in recent years. While much of the attention has focused on tenancy reform, landlords should not overlook the insurance implications.
With longer possession timelines and greater financial exposure, now is the time to review both rent guarantee and buy-to-let insurance to ensure protection remains aligned with the realities of today’s rental market.
By taking a proactive approach, landlords can place themselves in a stronger position to manage risk, protect rental income and navigate the changing regulatory landscape with confidence.
