Does Landlord Insurance Cover Loss of Rent?
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 7
- 2 min read
Owning rental property is a great way to generate passive income—but what happens when your property becomes uninhabitable due to a fire, storm, or other disaster? If tenants can’t live there, you can’t collect rent. That’s where loss of rent coverage comes in.
At Wexford Insurance, we specialize in protecting rental property owners with tailored landlord insurance policies. In this blog, we’ll break down what loss of rent coverage is, when it applies, and how to make sure your income is protected.
What Is Loss of Rent Coverage?
Loss of rent coverage—also known as fair rental value coverage—is a component of many landlord insurance policies. It reimburses you for lost rental income when your property becomes uninhabitable due to a covered peril, such as:
Fire or smoke damage
Storm or hail damage
Burst pipes or water damage
Vandalism or break-ins
This coverage ensures that even if your tenants must move out temporarily, you can still meet your financial obligations like mortgage payments, property taxes, and maintenance costs.
When Does Landlord Insurance Cover Lost Rent?
Landlord insurance does cover loss of rent, but only under specific conditions:
The damage must be caused by a covered peril (e.g., fire, windstorm, or water damage).
The property must be deemed uninhabitable by local housing codes or your insurer.
You must have proof of rental income, such as a lease agreement or rent receipts.
Coverage typically lasts until repairs are completed or up to a policy limit - often 12 to 24 months.
What’s Not Covered?
It’s important to understand what loss of rent insurance does not cover:
Tenant non-payment: If a tenant simply stops paying rent but continues living in the unit, this is not covered.
Voluntary vacancy: If your property is empty between tenants, you won’t be reimbursed.
Evictions or lease violations: These are considered business risks, not insurable events.
For these situations, you may need rent guarantee insurance, which is a separate policy that covers tenant default.
How Much Coverage Do You Need?
Most landlord insurance policies offer loss of rent coverage as a percentage of your dwelling coverage, typically 20–25%. To determine the right amount, consider:
Your monthly rental income
Local repair timelines
Seasonal rent fluctuations
The complexity of your property’s construction
At Wexford Insurance, our agents help you calculate the right coverage based on your property and market conditions.
Final Thoughts
Whether you own a duplex, triplex, vacation rental, Airbnb, or long-term rental, Wexford Insurance offers customized landlord insurance that includes loss of rent protection. We understand the unique risks rental property owners face and provide policies that keep your income secure - even when the unexpected happens.
FAQs
Q: Is loss of rent coverage included in all landlord insurance policies?
A: Often, yes - but some insurers offer it as an optional add-on. Always check your policy.
Q: How long does loss of rent coverage last?
A: Typically, until repairs are complete or up to 12–24 months, depending on your policy.
Q: Can I claim loss of rent if my tenant stops paying?
A: No. You’d need rent guarantee insurance for tenant default situations.
