What type of coverage does the fair rental value provide under the DP policy?

Fair rental value coverage under the Dwelling Policy (DP) is designed to compensate homeowners for the loss of rental income they might incur if their property is damaged and cannot be rented out. This coverage typically pays for the loss of rental income during the period it takes to repair the dwelling.

In the context of the DP policy, fair rental value coverage is usually set at 20% of Coverage A, which is the dwelling coverage limit. This percentage reflects the insurance industry's assessment of the average income a homeowner might lose if their property were to be rendered uninhabitable due to a covered peril.

Understanding that this coverage is directly tied to the Coverage A limit helps homeowners gauge how much rental income loss they could potentially recover, ensuring they can plan financially in the event of property damage.