Is your situation covered?
| Scenario | Typical verdict | Why |
|---|---|---|
| Fire makes unit uninhabitable | Usually covered | Fair Rental Value pays until repairs complete or coverage period ends. |
| Tenant stopped paying — no property damage | Usually not | Rent default is a lease issue, not insurance. Rent guarantee is a separate product. |
| Eviction in progress | Usually not | Requires a covered peril; eviction alone is not one. |
| Storm damage — tenant relocated | Usually covered | Wind, hail, and covered water damage all trigger loss of rent. |
| Vacancy over 60 days at time of loss | Depends on wording | Vacancy provision may suspend cover for vandalism, glass, water damage. |
General industry patterns. Your actual cover lives in your policy wording — PolicyPal reads it for you.
The short answer
US landlord policies (DP-1, DP-2, DP-3) include Fair Rental Value or Loss of Rents coverage: when a covered peril makes the property uninhabitable, the insurer pays the fair market rent during the reasonable time to repair. It does NOT cover missed rent from tenant default, eviction, or bad debt — those need a separate rent guarantee or landlord protection product.
Time and dollar limits
Coverage is usually 12 months OR 20% of dwelling coverage, whichever is greater. Actual Loss Sustained (DP-3) pays your real lost rent up to that cap; DP-1 pays a scheduled amount. Vacancy — typically over 60 consecutive days — suspends certain perils including vandalism, glass breakage, and water damage.
- 12-month cap common on DP-3
- 20% of Coverage A on many forms
- Vacancy clock resets narrowly
- Rent guarantee is a separate product
What PolicyPal checks
We identify whether your policy is DP-1 (named perils, ACV), DP-2, or DP-3 (open perils, replacement cost), the loss of rent limit and coverage period, the vacancy suspension language, and whether you carry loss assessment for HOA-owned rental buildings. We flag Airbnb/short-term exposure that voids landlord cover.
Filing the claim right
Document the lease, the current rent, tenant relocation date, and repair timeline. Insurers pay 'time reasonably required to repair' — not the actual duration of a slow contractor. Get two repair estimates and align the timeline to industry norms. Track tenant credits and mitigation efforts (finding a substitute unit).
Common denial and reduction patterns
Insurers reduce Fair Rental Value by expenses you're no longer incurring (utilities you don't pay while vacant). They contest the reasonable-repair timeline and refuse to extend when construction runs long. They deny entirely if the loss occurred during a vacancy over the policy threshold.
Frequently asked
- Does it cover a tenant who won't pay?
- No — you need rent guarantee insurance or an eviction-cost rider. Landlord policies handle property, not tenant behavior.
- What if I self-manage and don't pay for a property manager?
- You still get Fair Rental Value — coverage is based on lost rent, not lost profit.
- Is Airbnb income covered?
- Usually not on a landlord policy. Short-term rental endorsement or specialty carrier (Proper, Slice) is required.
- How long can I claim loss of rent?
- Up to 12 months on most DP-3 policies; some carriers offer 24-month endorsements. Always check the specific limit.
- What if the unit was already vacant when it burned?
- Fair Rental Value pays based on prior rental rate if you can prove the unit was actively marketed and expected to re-let.
- Does mortgage still have to be paid?
- Yes — loss of rent covers rent, not mortgage. Some policies offer mortgage payment endorsements separately.
Your policy is the only source of truth
Stop guessing. Check your actual policy.
Generic answers don't pay claims. PolicyPal reads your policy wording in seconds and tells you, in one sentence, whether you're covered.