Loss of rent coverage under a property insurance policy covers you for damages caused by an insured event, like a fire or severe weather. It doesn’t cover you for periods of rental voids, though many landlords might think it would. If you want to claim under this section of your policy, make sure you have documentation of the damages caused by the insured event.
When you buy property to rent out, you’re ensuring a stable income for yourself even as the value of the property appreciates steadily. However, what if an unforeseen event damages such rented or let-out property? It’s always better to be prepared for such situations with a loss of rent cover.
What is Loss of Rent Cover Insurance?
Your rental property always faces the risk of damage or becoming uninhabitable, whether due to a fire or other natural disasters. If your tenants have to vacate the property because it’s no longer liveable, you could lose rental income indefinitely. That’s where Loss of Rent cover comes in. The loss of rent cover will provide compensation for the rent you lose during the property’s repair, ensuring a continued income from it.
How Do I Get Loss of Rent Cover?
Loss of Rent insurance is an optional cover that you can add to your commercial building insurance or property insurance. This is an additional premium that can be added when you get a quote, or at any time to your existing insurance policy.
Benefits of Having Loss of Rent Insurance
Protects Your Return on Investment
Loss of Rent cover protects your investment in your rental property by covering the cost of repairs and maintenance in the event that your tenants are unable to pay rent. This type of insurance is essential for landlords who want to safeguard their investments and ensure that they can still make a profit even if their tenants stop paying rent. This enables the property owner to carry out the necessary repairs and maintenance without worrying about receiving the rent.
Bring down the Business Risk
As a professional real estate investor, you understand the importance of diversifying your portfolio to protect yourself from potential risks. One such risk is the possibility of sabotage by tenants, which can lead to a loss of rent. To help offset this risk, you can purchase loss of rent coverage, which will help reimburse you for any lost rent due to tenant-caused damage.
Talking about Exceptions to Loss of Rent Coverage
Loss of rent insurance doesn’t cover the incident that happened due to the owner’s negligence. If the landlord could have acted to prevent or reduce the potential loss, then the claim may be denied. Also, some policies will only pay the landlord the fair market value for the rental, rather than what the tenant was paying. If the tenant was paying more than what the insurer considers to be fair market value, then the landlord or owner could be out of pocket for the difference.
Discuss Your Insurance Needs with SecureNow
If you’re a landlord of a commercial property, you should definitely look into the loss of rent coverage policy. The pros at SecureNow have years of experience and will be more than happy to help you find the right type of insurance policy for your needs. Give us a call or shoot us a message today for instant quotations.