Review Your Rental Policy for Loss-Of-Rents
If you rent an apartment or home and a fire occurs, will your insurance policy fully cover your losses?
Renters are urged to review their insurance policy to make sure they are properly protected in case of a fire or other catastrophic loss that could make a rental unit uninhabitable.
Standard landlord property insurance policies allow for 10 percent of the dwelling coverage for loss-of-rents coverage. Loss-of-rents is the amount a renter loses while waiting for the rental unit to be rebuilt.
For example, if your rental home is insured for $100,000 and burns to the ground, your insurance company allows $10,000 for loss-of-rents coverage. In many cases, it can take up to 12 months to rebuild a rental home or apartment complex from a catastrophic loss. If a loss does occur, $833 would be available per month for loss-of-rents. If you are now renting the property for greater than this amount, you will have a shortfall in coverage.
So check out your policy -- the 10 percent automatic coverage offered by your insurance company might not be enough to cover your loss. We strongly suggest you review your policy to ensure that your coverage is adequate to cover your property in the event of a loss.
The extra coverage cost is minimal. Call us at (626) 839-6061 if you need assistance in reviewing your policy.
We are pleased to provide this "Bulletin" as a service to you. While this information was obtained from sources believed to be reliable, its accuracy is not guaranteed. It does not change or alter insurance contracts or coverages.
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