Loss of Rent (LOR) Cover Versus Rent for Alternative Accommodation Cover
Home insurance policy refers to a type of financial cover that protects your home/property/flat and its contents from several unforeseen risks.
In home insurance, Loss of Rent (LOR) cover and Rent for Alternative Accommodation cover are two distinct components serving different purposes.
Loss of Rent (LOR) cover helps landlords by covering lost rental income if their property becomes unavailable due to damage. On the other hand, Rent for Alternative Accommodation cover pays for temporary housing if you can't stay in your primary residence due to damages.
Let's understand the difference between loss of rent cover and rent for alternative accommodation cover in detail:
| Aspects |
Loss of Rent Cover |
Rent for Alternative Accommodation Cover |
| Purpose |
Compensates for lost rental income. |
Covers additional living expenses incurred due to displacement. |
| Eligibility |
Applicable to rental properties. |
Applicable to primary residences. |
| Triggering Event |
The rented property becomes uninhabitable due to covered peril. |
The primary residence becomes uninhabitable due to covered peril. |
| Coverage Period |
Duration of repair period or until property is habitable again. |
Duration of displacement until primary residence is restored. |
| Example |
Rental property damaged by a storm, resulting in loss of rental income. |
Primary residence damaged by costal waves, requiring temporary housing for a certain period. |
Choosing the Right Home Insurance Coverage Today!
When buying a home insurance policy, it is crucial to identify your needs and then analyze your circumstances carefully. Remember, if you own rental properties, Loss of Rent Cover is essential to protect your rental income stream during repairs. On the other hand, being a homeowner a Rent for Alternative Accommodation Cover ensures you have a place to stay if your home becomes uninhabitable due to unforeseen circumstances.
The Bottom Line!
As a homeowner, you should differentiate between Loss of Rent (LOR) cover and Rent for Alternative Accommodation cover. Correct knowledge helps you find adequate coverage and prepare yourself for unexpected events that may disrupt your pocket.
