Which statement is NOT true regarding fair rental value coverage in a dwelling policy?

Fair rental value coverage is designed to compensate property owners for lost rental income due to damage to their property caused by insured perils. Understanding the specifics of this coverage helps clarify why certain statements may be deemed untrue.

One of the defining characteristics of fair rental value coverage is that it typically covers the loss of rental income a property owner would have collected had the property not been damaged. It accounts for expenses that would have continued, such as utilities and property taxes, thereby ensuring that the homeowner is only compensated for net losses. As for the period of coverage, it generally continues until the necessary repairs are completed, ensuring that the property owner is supported financially during this time. Additionally, the coverage period is not restricted by the expiration of the insurance policy, which allows the property owner to recover for the full time it takes to restore their property after damage.

The statement that is not true implies that loss or expense from the cancellation of a lease is included in this coverage. This would not generally be accurate, since fair rental value coverage specifically pertains to losses from physical damage to the dwelling that impacts the ability to collect rent, rather than lease cancellations which may arise from other circumstances unconnected to the property damage itself.