Whether rent guarantee insurance is worth it is an arithmetic question with two inputs a landlord can work out in ten minutes: the realistic loss from one defaulting tenancy, and whether your finances could absorb it. Everything else about the product is detail, and the detail only matters once the answer to that is yes.
The realistic loss from one bad tenancy
Not one month. A tenant who stops paying is usually still in the property several months later, because notice periods, court listing and enforcement each take time. Add legal costs for the possession action and the cost of putting the property back into a lettable state. For most properties the total is several months of rent plus fees.
Whether you could absorb it
A landlord with one mortgaged property and no reserve is buying certainty, which is a sound reason to insure even at an unfavourable expected value. A landlord with a portfolio absorbs the occasional bad tenancy from the rest of the book, and paying a premium on every property to insure a loss they can carry is usually more expensive over time.
What tips the balance either way
In favour: a mortgage that depends on the rent, a tenant type with higher default rates, and the legal expenses half, which is often worth the premium alone. Against: several properties, cash reserves, and a referencing process you will not actually run to the insurer's standard, in which case the policy will not pay anyway.
Questions people ask about is rent guarantee insurance worth it
How much does it cost?
Usually a modest annual amount per property or a percentage of the annual rent, varying with the cover period and whether legal expenses are included.
Is it worth it for one property?
Usually, if several months without rent while a mortgage continues would be a serious problem. The legal expenses half often justifies it alone.
When should I self insure instead?
Once the portfolio is large enough that arrears are a predictable running cost rather than a shock.