In property insurance, what does loss of rental income cover?

Loss of rental income coverage is designed to protect property owners from financial losses that arise when their rental property becomes uninhabitable due to covered damages, such as fire or severe storm damage. When a property is damaged to the point that it cannot be rented out, the owner faces lost income during the repair period. This coverage compensates landlords for the rental income they would have received if the property were still habitable, ensuring they can manage their financial obligations even during the downtime caused by the damage.

Understanding this, other options do not align with the specific purpose of loss of rental income coverage. For example, costs associated with property maintenance are ongoing expenses that do not relate to the immediate loss of income due to damage. Legal fees for lease agreements are generally separate business expenses not tied to the physical condition of the property and do not compensate for income loss. Increased property taxes after damage are an administrative cost and do not relate to the income potential of the property, which is the focus of the loss of rental income coverage.