Loss of business income/rental claim question.
Insured has a fire in their apartment building
2 units are affected and both tenants can now not live in their apartments.
The insured (landlord) has two empty apartments and graciously puts those tenants into the vacant apartments.
The tenants continue to pay rent.
The insurance company adjuster states that since there is no loss of income there is no claim.
My argument would be that now the landlord has lost the opportunity to rent those two previously vacant apartments, so the insurance company should cover the loss of rental income nonetheless.
If the building had for example 6 empty apartments, I could understand the insurance co's point.
Your thoughts would be appreciated.
New York Subscriber
This is where the completion of a business income worksheet becomes essential to knowing if there has been an actual loss of income due to the damage. FC&S has the following article that discusses the completion of the business income worksheet. In the situation you describe, it does not sound like the empty apartments were being used. If they had not been in the process of being rented out on a regular basis, then the insured likely did not lose any income by moving the tenants into the dormant properties. The insured will need to be able to show calculations of how their income changed as a result of the loss, not simply provide hypothetical reasoning.
Here is the business income worksheet article: