Loss of rent · For owners
The units sit empty after a fire. Insure the rent they would have paid.
Loss of rent covers the rental income a building loses while it’s repaired after a covered loss. It’s usually added to the property policy as rental income cover, a kind of business income cover.
Light RFP Risk Management Services LLC · NY DFS License # PC-1978982
What loss of rent covers.
Typically covered
- Rent you would have collected while units can’t be used after a covered loss
- Expenses that carry on during repairs, like payroll and loan payments, on many forms
- Extra expense to reopen sooner, such as overtime or temporary repairs, if the policy includes it
- Rent lost after repairs while units re-lease, if you add an extended period of indemnity
- Rent lost when authorities close access after nearby damage, for a limited period the policy sets, on many forms
Where another policy answers
- The repairs to the building itself: Commercial property
- Rent lost while a new building is under construction: Builder’s risk, if you add delay-in-completion cover
Usually not covered
- Rent lost to a loss the property policy excludes, such as flood
- Tenants who stop paying, or vacancy from the market
Who on the block needs it.
Owners of rental buildings
The mortgage, payroll and upkeep don’t stop when the units are empty. Lenders often require a set number of months of rent cover; size it from your gross rents, building by building.
Mixed-use and commercial owners
Retail and office rents count too. Insure the rent your leases actually produce, building by building.
What the lender asks for
Lenders usually ask for rent loss or business income cover for a set period (for example 12 months of gross rents), written alongside the property policy.
Repairs to bid out after a loss? Post the RFP free and compare the bids side by side. Bidding on the repair work instead? Contractor insurance is matched to the bid spec, and bid bonds are free in every state we serve.
How we quote it.
Loss of rent is written on the property policy. Quote the two together on the commercial property application, or, if the building is insured already, send the short loss of rent application and we talk through how to add it.
Tell us about the buildings
Each building’s rents, how long a rebuild could take, your property policy, and your lender.
We take it to market
A Light RFP broker reads your application, contacts you about anything missing, and takes it to the insurers that write loss of rent for buildings like yours.
Compare the quotes
Limits, deductibles and exclusions side by side, matched to what your lender requires. Applying commits you to nothing; you choose whether to buy.
We place it
Our brokerage puts the policy you choose in force and issues the certificates your lender asks for.
Our application
3 sheets. Plan on 10 to 15 minutes for one building with no claims, with your rent roll to hand.
- One building, no claims
- about 30 answers, 28 required
- Three buildings, a lender and a claim
- about 57 answers, 51 required
Quoting it with your property instead? The commercial property application asks how many months of rent to insure.
Follow-up questions appear only when an answer calls for them.
What it asks
Open a sheet for a few of its questions.
LR-01Owner
- Do you own the buildings, manage them for others, or both?
- What is the company’s name, as the owner or the manager?
LR-02Buildings and rents
- What does each building collect in rent over a year?
- How long could a rebuild of your largest building take?
- Should it keep paying while empty units re-lease?
LR-03Property policy, lender and claims
- Who insures the buildings for property today, and when does it renew?
- Does a lender require loss of rent cover, and for how many months?
Have these ready
- Your rent roll, by buildingTwelve months of gross rents for each building, plus other income such as parking, laundry or storage. The form lists ten buildings. With more, send the full rent roll to insurance@lightrfp.com (a spreadsheet is fine).
- How long a rebuild could takeFor your largest building, from the day of a loss until tenants could move back in.
- Your property policyWho insures the buildings today, when it renews, and whether it already includes rental income.
- Your lender’s requirementsHow many months of rents the loan asks you to insure, if any.
Loss of rent questions.
Is it the same as business income cover?
For a landlord, mostly. Rental income cover is a form of business income cover that measures the loss in rent. Many property policies offer it as an option.
How long does it pay?
Until the building could reasonably be repaired, up to the policy’s limit or period. An extended period of indemnity can keep it paying while units re-lease.
Does it cover a tenant who stops paying?
No. It pays only when a covered loss, like a fire, makes the space unusable. Unpaid rent and market vacancy aren’t insured losses.
How do I set the limit?
Start from twelve months of gross rents, building by building, then cover the months a rebuild could take or the period your lender requires, whichever is longer.
What is actual loss sustained?
A way to write it with no fixed dollar limit: it pays the rent you actually lose for a set period, often 12 months. Many lenders ask for it; check your loan documents.
What affects the price?
Your gross rents, how long a rebuild could take, the period you insure, and what prices the property policy itself: the building’s construction, age, location and claims.
Get a loss of rent quote.
Getting a quote is free. Light RFP earns a commission from the carrier on all policies.
Light RFP Risk Management Services LLC · NY DFS License # PC-1978982