Loss-of-rent cover within a landlord policy pays the rental income you lose when insured physical damage — such as fire or flood — makes the property wholly or partly unlettable, for an agreed indemnity period while repairs are completed. It does not pay when a tenant simply defaults on rent.
What it pays for
If a fire guts three units in your block, the policy pays the rent those units would have earned while they're rebuilt and re-let — keeping the mortgage, rates and service contracts funded from insurance rather than savings. Partial losses are paid proportionally.
What it doesn't pay for
Tenant default is a credit risk, not a property risk. A tenant who stops paying while the building is perfectly habitable is not an insured event under loss-of-rent cover. Separate tenant-default products exist; ask a broker what's currently available and on what terms.
How long should the cover run?
The indemnity period should reflect a realistic timeline to obtain approvals, rebuild and re-let — for substantial buildings that's rarely under 12 months, and 24 months is common for larger blocks. An optimistic 6-month period that runs out mid-reconstruction defeats the point of the cover.
How it fits into landlord insurance
Loss of rent is usually an inexpensive extension to the building policy rather than a standalone product. A complete landlord insurance programme wraps the building, your fixtures, your liability to tenants and visitors, and the income — priced across 9+ insurers. Read more on our dedicated loss of rent insurance page.
