When disaster strikes and a home is seriously damaged by an insured peril the dwelling may not be habitable until all the repairs have been completed. In the case of a rented home, the tenant may have to move out so the landlord /policyholder’s rental income will cease until the claim has been finalised and tenants move back in. In these circumstances an insured will not only pay for the repairs or replacement, they will also pay for the cost of temporary accommodation or loss of rent. The figure, usually a percentage of the buildings and contents sums insured would be detailed in the policy wording.
The temporary accommodation would be comparable with the insured home, to make the wait until the insured can move back in as comfortable as possible. Usually the cost of accommodation for domestic pets during the repairs is also included, as it may not be possible for animals to live with the insured during the upheaval. There may be a limit placed on how long monthly payments would be made, typically 12 months from the date of the claim.