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Protecting Your Income With Loss of Rents Coverage

Updated: Jul 11, 2023


How would your businesses and income be affected if your property sustained damage to the point that it is no longer habitable for your tenants? As an investor, you have property insurance that may cover the cost of repairs, but what about the rental income you will lose out on in the process? Repairs can take a while, especially with today’s supply chain issues.


We have a program that program offers Loss of Rents coverage that can be added as part of your property policy and may cover lost rental income for up to 6 or 12 months (selected when coverage is added). This type of protection is triggered by a covered loss that renders the home uninhabitable while the damage is being repaired. Covered means that the loss is not excluded on your property policy.


For example, let’s say you have Special Form coverage, and a burst pipe causes water damage so severe that your tenant must move out of the home while repairs are being made. Since Special Form includes Water Damage, both the repairs and the lost rent may be covered. If you have Basic Form coverage, neither the repairs nor the lost rent would be covered because Water Damage is excluded on Basic Form. It is important to note that Loss of Rents cannot be obtained in the absence of a property loss.


Common Confusion


Loss of Rents is commonly confused with the Skip Rent component of our Tenant Protector Plan. Skip Rent is different in that it may reimburse you one month’s rent up to $1,000 if your tenant skips out on you midway through their lease or is successfully evicted. This coverage can also be triggered by other types of unexpected vacancies like military deployment and untimely death. To reiterate, Loss of Rents is designed to replace monthly rent if an insured peril hits your property and, as a result, tenants must move out of the home. Additionally, Loss of Rents is not covered if the triggering property loss is not covered.


Loss of potential future income may not be covered. What does this mean? Let’s say you have a short-term/vacation rental become uninhabitable and repairs are expected to take six months. You could obtain loss of rents for that six-month period, but if you do not advertise the rental to tenants after the six months, you may not be reimbursed. Bookings in place that need to be cancelled due to the repairs may be reimbursable.


Similarly, if your rental is damaged and repairs are expected to take six months, but the current tenant’s lease is up in three months, you may only be able to obtain loss of rents for the timeframe of the current lease (three months). If there is proof that the current tenant intends to renew their lease, loss of rents may be covered for the full six months.


To learn more or get a quote


Click to learn more about ROC’s Tenant Protector Plan.



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ROC Financial Solutions, LLC. is an originating entity and financing consultant of business purpose funding.  9105 All Saints Road Unit D 330, Laurel MD 20723  ROC Financial Solutions, LLC. is licensed or exempt from licensing all states that they do business in.  We lend on real estate in AL, AK, AR, DC, CO, CT, DE, FL, GA, HI, IL, IN, KS, KY, LA, ME, MD, MA, MI, MO, MT, NH, NM, OH, OK, OR, PA, RI, SC, TN, TX, VA, WA, WV, WI, WY.   (Our down payment assistance program is available nationwide).  We lend on business loans in all 50 states.  ROC Financial Solutions originates loans under 12 CRF 1026.3 (a)(1) and 12 CFR 1024.5 (b)(2) Business purpose loans that are exempt from coverage under RESPA as defined by 12 CFR 1026.3 (a)(1) of Regulation Z.   ROC Financial Solutions, LLC only originates business purpose loans on non-owner-occupied residential and commercial, non-TRID regulated real estate properties, or business working capital loans.   Rates, terms, and conditions offered to qualified borrowers, may vary upon loan product, deal structure, location, lender, or other applicable considerations, and are subject to change at any time without notice.   Moreover, any rates, terms and conditions communicated via email shall only constitute a general, non-binding expression of interest on the part of ROC Financial Solutions, LLC., and the associated lender and do not create any legally binding commitment or obligation on the part of ROC Financial Solutions, LLC., and are expressly subject to, but not limited to, the credit, subject property, Investor experience, legal review, and lender approval process.  ROC Financial Solutions LLC., also operates as a Wholesaler on investment residential and commercial, non-owner-occupied properties.  ROC Financial Solutions, LLC., is exempt from licensing for these types of properties and is not a licensed real estate agent or broker.  The recipient of this message agrees to hold harmless ROC Financial Solutions LLC.  DISCLAIMER: ROC Financial Solutions does not finance owner occupied residential real estate. We offer commercial business purpose funding options strictly for non-owner-occupied real estate, and businesses.  Disclosure:  This is a partner program whereas ROC Financial Solutions LLC works with a private lender to offer these services, and ROC Financial Solutions will earn a referral fee from the lender for offering such services.  If you have received this message in error, please delete it.   Our Privacy Disclosure Statement can be found at https://www.rocfinancialsolutions.com/private-policy   Copyright © 2024 ROC Financial Solutions LLC, All rights reserved. 

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