Rent Guarantee Insurance

Boaz Abramson and Stijn Van Nieuwerburgh

Journal of Political Economy, 2026, vol. 134, issue 9, 2557 - 2601

Abstract: Rent guarantee insurance (RGI) provides tenants with insurance against nonpayment of rent. We introduce RGI in a quantitative equilibrium model of housing insecurity and show it increases welfare by improving risk sharing across idiosyncratic and aggregate states, reducing the need for large security deposits and reducing homelessness that imposes large costs on society. While unrestricted access to RGI is not financially viable because of moral hazard and adverse selection, restricting access can restore viability. Private insurers target better-off renters, while public insurers focus on households most at risk of homelessness. Stronger tenant protections increase the effectiveness of RGI.

Date: 2026
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Working Paper: Rent Guarantee Insurance (2024)
Working Paper: Rent Guarantee Insurance (2024)
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