Loss of Rents when Renting to Relative

August 4, 2010

We are working a claim in which there is a rental policy in place that covers loss of rents. The insured rented to her son and in lieu of rent he paid the mortgage payment. They did not have any formal agreement. When the fire occurred, the carrier said there was no loss of rents due to her because there were no rents collected. The son had to stay somewhere else and so was no longer paying her mortgage payment as he could not stay there and yet she could not rent it. Are they out of luck because there was not a formal agreement?

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