Coverage D — Fair Rental Value covers situations when the insured property has been rented to others and a peril insured against under the policy causes the property to be unfit for normal use. Coverage D will cover the loss of the fair rental value of the property.
For example, Norbert has a Dwelling policy on a home that he owns and rents out to Christopher. A windstorm causes extensive damage to the home, making it uninhabitable. Therefore, Christopher moves out and doesn’t pay the $1,000 monthly rent. Coverage D reimburses Norbert for the loss of rental income.