Insuring Your Rent Roll: Covering Lost Rental Income html Копировать Редактировать
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When unexpected events—from a sudden repair to a disaster—force your tenants out, you risk losing months of rental income. Fortunately, most landlord policies offer optional coverages designed to protect your cash flow when a unit goes unrentable.
Here are the primary insurance options that can replace lost rent:
- Loss of Rent Endorsement
This add‑on to your standard landlord (DP-3) policy reimburses you for rent you can’t collect while repairs are underway after a covered peril (fire, storm damage, vandalism, etc.). Coverage periods usually range from 6 to 12 months. - Business Income (Business Interruption) Coverage
Often available on commercial or multi‑unit policies, this pays net rental income lost during the restoration period, plus continuing operating expenses such as utilities or mortgage interest. - Extended Period Coverage
If repairs exceed the initial timeframe, an extended option can prolong benefits—especially useful after large‑scale losses like hurricanes or floods. - Flood and Earthquake Policies
Standard landlord insurance excludes these perils. If you’re in a high‑risk zone, purchase stand‑alone flood or quake coverage with its own loss‑of‑rent provisions. - Civil Authority Coverage
If a government order (e.g., mandatory evacuation or condemnation) prevents tenant occupancy, this endorsement can reimburse lost rent for a specified period.
Keep in mind:
- Policies often impose a waiting period (commonly 48–72 hours) before benefits begin.
- Reimbursement is typically limited to the actual rent you were collecting at the time of loss.
- Some insurers cap payments at monthly rent or a fixed dollar limit per occurrence.
Premiums vary based on location, property value and claims history. Landlords are recommended to verify coverage details, limits and exclusions with their insurance agent or broker—and compare quotes from multiple carriers.
Before purchasing, it’s advisable to review your policy declarations and, if needed, consult a licensed insurance professional or legal advisor to ensure your rental income remains protected through every setback.
