Loss of Rent Coverage or Rent for Alternative Accommodation: Which Is Better?

Posted on: Jun 26, 2024 | 3 mins | Written by: HDFC ERGO Team

Loss of Rent Coverage or Rent for Alternative Accommodation: Which Is Better?

Loss of Rent Cover Vs. Rent for Alternative Accommodation Cover

Regarding home insurance, ensure you can safeguard your property against unforeseen circumstances. However, there are instances when the living conditions and the rental income are threatened. In such cases, you can put property insurance to great use.

Difference between Loss of Rent Cover & Rent for Alternative Accommodation Cover

There are two important types of coverage: loss of rent cover and alternative accommodation cover.

The Loss of Rent (LOR) Cover is designed for landlords. Usually, this is covered by a home insurance policy. It compensates for the lost rental income if their property becomes uninhabitable due to natural disasters. It includes events like fire, flood, or vandalism. The Loss of Rent is a financial backup for a steady income even when the property is undergoing repairs.

The rent for alternative accommodation cover is for homeowners with a primary residence. The homeowner's insurance helps if your home becomes unlivable due to a catastrophic natural event and reimburses for the rent incurred during this period.

What is a Loss of Rent (LOR) Covered in Home Insurance?

The LOR in home insurance is particularly for homeowners dependent on rental income.

Features of Loss of Rent (LOR) Cover in Home Insurance

• Eligibility:

It's an add-on to the standard home insurance policy.

• Coverage:

Covers events mentioned in the policy, such as fire, theft, storms, etc.

• Payout Limits:

The insurance company will reimburse the amount of rent lost for a specified limit.

What is Rent for Alternative Accommodation Cover in Home Insurance?

The rent for alternative accommodation coverage is called Additional Living Expense (ALE) coverage. Homeowners with a primary residence can buy it for financial assistance when their home becomes uninhabitable.

Features of Rent for Alternative Accommodation Cover in Home Insurance

• Eligibility:

May be included in comprehensive home insurance policies or as an add-on.

• Coverage:

Covers losses from insured perils outlined in your policy.

• Accommodation Limits:

The policy will specify the type of accommodation covered (e.g., apartment, hotel) and set a daily or total payout limit.

Conclusion

When choosing between loss of rent cover and rent for alternative accommodation cover, consider your role – landlord or homeowner. Check out plans for the best insurance that gives you maximum benefit and coverage.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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