What does Fair Rental Value Coverage mean? Read on to discover the definition & meaning of the term Fair Rental Value Coverage - to help you better understand the language used in insurance policies.
Fair Rental Value Coverage
Provided as part of additional living expense (ALE) under a homeowners policy and as Coverage D under a dwelling policy. If the insured rents a home (or a part of a home) to a tenant and that home (or that part of a home) becomes uninhabitable due to damage from a covered peril, FRV coverage reimburses the insured for the lost rent. Any expenses that do not continue while the home (or that part of a home) is uninhabitable (e.g., electricity) are then subtracted from the fair rental value. The payment will be for the least amount of time necessary to repair or replace that home (or that part of a home) rented or held for rental to others.
We hope the you have a better understanding of the meaning of Fair Rental Value Coverage.