When arranging Block of Flats Insurance or Landlord Insurance, it’s easy to focus on rebuild costs, excesses and premiums. However, one equally important feature that’s often overlooked is whether the indemnity period for Loss of Rent and Alternative Accommodation cover is long enough to protect you following a major claim.
While many policies include a 12-month indemnity period as standard, rebuilding after serious property damage can often take much longer. If your cover expires before the building is ready to be occupied again, you could be facing unexpected financial costs.
What is Loss of Rent & Alternative Accommodation Insurance?
Loss of Rent and Alternative Accommodation are two separate covers that can be included within Block of Flats Insurance and Landlord Insurance following insured damage such as a fire, flood or burst pipes.
- Loss of Rent Insurance helps protect landlords and property owners by replacing rental income that would otherwise be lost while the property is being repaired or rebuilt.
- Alternative Accommodation helps pay for suitable temporary accommodation for owner-occupiers or other insured residents if their home becomes uninhabitable while repairs are carried out. Depending on the policy wording and the circumstances of the claim, this could include rented accommodation or hotel accommodation where appropriate.
Whether a property is considered uninhabitable (unsafe or impractical to live in) will depend on the circumstances of the claim and your insurer’s assessment.
Does Block of Flats Insurance and Landlord Insurance Cover Loss of Rent & Alternative Accommodation?
In many cases, yes. Landlord insurance and Block of Flats Insurance can include cover for Loss of Rent and Alternative Accommodation following an insured event. However, the level of protection and the indemnity period can vary between policies.
For mixed-occupancy blocks, these covers work together. While Loss of Rent helps protect landlords against lost rental income, Alternative Accommodation helps ensure owner-occupiers or other insured residents have somewhere suitable to live while repairs are carried out.
How long should my indemnity period be?
The indemnity period is the maximum length of time your insurer will continue paying loss of rent and, where applicable, alternative accommodation costs following insured damage.
Although a 12-month indemnity period may seem sufficient, rebuilding a property is rarely straightforward.
Delays can occur due to:
- Extensive fire or flood damage
- Structural surveys and investigations
- Planning permission or building control requirements
- Contractor availability
- Material shortages
- Unexpected issues discovered during the rebuild
As well as checking how long cover lasts, it’s also important to understand any financial limits that apply. Some policies place a maximum limit on Loss of Rent or Alternative Accommodation payments, so it’s worth ensuring both the amount of cover and the indemnity period are suitable for your property.
Is a longer indemnity period right for my property?
Every property is different, so there’s no one-size-fits-all answer.
For many smaller blocks of flats, a 24-month indemnity period may provide greater peace of mind than the standard 12 months. However, larger, more complex or specialist buildings, including listed or non-standard construction properties, can often take significantly longer to repair or rebuild following major damage. In these cases, a longer indemnity period may provide valuable additional protection.
When reviewing your policy, it’s worth checking exactly how both your Loss of Rent and Alternative Accommodation covers operate, how long payments will continue, and whether the indemnity period reflects realistic rebuilding times.
How Lansdown Insurance Brokers Can Help
Lansdown Insurance Brokers are specialists in Landlord Insurance, Rent Guarantee Insurance and Block of Flats Insurance. Whether you’re a landlord, property manager, or residential property owner, call the team on 01242 524498 or email enquiries@lansdowninsurance.com.
Lansdown is part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.