What does Coverage D - Fair Rental Value cover in a homeowners policy?

Coverage D - Fair Rental Value in a homeowners policy specifically compensates the insured for loss of rental income due to a covered loss that makes the property uninhabitable. This coverage applies when a property that is rented out experiences damage that prevents tenants from staying, thus creating a loss of income for the homeowner who relies on that rental revenue.

This provision ensures that homeowners can recover some of their financial losses while their property is being repaired, promoting financial stability despite the unexpected damage. The focus on rental income distinguishes this coverage from others that may address different aspects of property or liability, like personal liability expenses, medical payments, or additional living expenses, which pertain to different situations in the realm of homeowners insurance.