Does Rental Property Insurance Cover Lost Rental Income?

As property owners and landlords, protecting your investment is a top priority. One common concern is what happens if your rental property becomes uninhabitable due to a covered event. Can your insurance help replace the lost rental income you were counting on? At TS Insurance, we understand how important it is to keep your rental business running smoothly, even when the unexpected occurs.

Understanding Rental Property Insurance and Lost Income

Rental property insurance, often called landlord insurance, is designed to financially protect property owners from a range of risks, including damage from fires, accidents and crime. But what about the income you rely on from tenants? Many policies offer a feature known as “loss of rental income” coverage. This coverage may help reimburse you for lost rental payments if your property is temporarily unlivable due to a covered peril.

When Does Loss of Rental Income Apply?

Loss of rental income coverage typically applies when:

• Your property is damaged by a covered event (e.g., fire)
• The damage makes the property uninhabitable for tenants
• Repairs are necessary before tenants can return

It’s important to note that this coverage does not apply to lost income from tenant nonpayment, voluntary vacancies or maintenance issues. Certain incidents may also explicitly be excluded from many policies, such as floods and earthquakes.

How Our Team Can Help

At TS Insurance, we pride ourselves on helping landlords, property managers and real estate investors in and around Katy, TX find insurance solutions that fit their needs. Our team can review your current policy, explain nuances regarding coverage for loss of rental income and help you find suitable rental property insurance.

Contact us today to discuss your rental property insurance options and find a policy capable of accounting for potential lost income arising from unexpected situations.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.