Landlords buy squatters insurance after renters’ rights act
Landlords are snapping up a new form of coverage after the Renters’ Rights Act took effect, according to recent market data.
Policy surge follows legislative change
Insurance provider ARAG reported an 11% rise in sales of legal‑expenses and rent‑guarantee policies during the first four months of 2026 compared with the same period a year earlier. The uptick is largely driven by a £300 “squatters” insurance product that promises protection against illegal occupation of rental units.
The Renters’ Rights Act, which came into force earlier this year, expands tenants’ rights to remain in a property while disputes are resolved. Landlords say the new rules make it harder to reclaim premises quickly, prompting them to seek additional safeguards.
Under the new legislation, tenants can contest evictions on a broader range of grounds, and courts are required to consider alternative dispute mechanisms before ordering possession. Critics argue the act tilts the balance toward renters, while supporters claim it curbs abusive practices.
What the coverage offers
The £300 policy covers legal costs associated with evicting occupants deemed to be squatting, as well as potential loss of rent while the matter is pending. It does not replace standard landlord insurance but adds a layer aimed at the specific risk highlighted by the act.
ARAG’s sales data show that the product is gaining traction among small‑to‑medium landlords who lack in‑house legal teams.
Industry observers point out that the surge may also reflect broader concerns about the cost of litigation. Legal expenses can quickly outpace the £300 premium, especially if a case drags on for months.
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While the insurance offers a safety net, it does not guarantee that a landlord will recover lost rent. The policy’s value depends on the outcome of each case and the ability of the insurer to fund legal representation.
Some landlords are pairing the coverage with professional services that specialize in dispute resolution, hoping to streamline the process and reduce exposure.
In practice, the policy’s effectiveness will hinge on how frequently courts apply the act’s provisions and whether landlords can still secure swift possession orders when necessary.
Looking ahead, the market may see further product innovation as insurers respond to evolving landlord‑tenant trends.
ARAG’s recent growth can be traced back to its strategic acquisition of DAS UK at the start of 2024, which merged the two firms into a combined UK operation with gross written premium around £220 million. This expansion has positioned the insurer to roll out niche products such as the squatters policy, leveraging a broader portfolio of legal‑expenses solutions.
Dave Haynes, the CEO of ARAG UK, has highlighted the relevance of the company’s offerings in light of Labour’s legislative agenda, noting that the new legal framework directly fuels demand for specialised coverage. His comments underline how regulatory changes can reshape product development cycles within the insurance sector.
Beyond the immediate landlord market, the broader insurance ecosystem is experiencing parallel shifts. Technology‑driven initiatives, such as AI‑assisted underwriting and integrated broker management platforms, are reshaping how policies are designed, priced, and delivered. These developments suggest that insurers like ARAG are likely to continue refining niche products to meet the precise needs of property owners handling an increasingly complex legal environment.
