ALE for Landlords: How Fair Rental Value Coverage Works
Garr Russell
CEO, Fireside RV Rental · Updated July 23, 2026
Landlords get the Loss of Use conversation backwards more often than any other group. They assume their policy houses the displaced tenant. It doesn't — it protects their rent, which is a different (and, for the landlord, more relevant) thing.
Two sides of Loss of Use
Loss of Use splits by who occupies the home:
- Owner-occupant → Additional Living Expenses (ALE): the extra cost of living elsewhere.
- Landlord → Fair Rental Value: the lost rental income while a covered loss makes the unit uninhabitable.
So a landlord doesn't file for ALE — they claim Fair Rental Value to keep income flowing during repairs. The displaced tenant claims their own renters policy for housing. Two policies, two claims, two adjusters — running on the same repair timeline.
What Fair Rental Value pays, precisely
The concept is simple; the numbers have edges worth knowing:
| Element | How it works |
|---|---|
| The base number | Fair market rent for the unit — your current lease is the primary evidence |
| The period | While the unit is genuinely uninhabitable from a covered peril, until repaired or the limit runs out |
| The deductions | Expenses that stop while it's empty — some utilities, certain services you normally provide |
| Vacant units | Can still qualify at market rate, with harder scrutiny — comparable listings help |
| Rent abatement | In many states, rent legally abates on an unlivable unit; FRV exists to fill exactly that gap. Claiming FRV and collecting rent for the same period is a claim problem |
| Taxes | FRV replaces rental income — assume income-like treatment and confirm with your tax professional |
Document like the income stream it is: the lease, the damage, the contractor's timeline, and the dates the unit was down.
The mistake that costs more than the rent
Here's the pattern we see from the housing side: the FRV claim protects this year's rent, and then the landlord loses the tenant — who lands in a hotel across town on their own renters claim, finds another apartment by month two, and never comes back. Turnover, vacancy, re-leasing costs, and (in a soft market) a lower rent follow. FRV insures the income; it doesn't insure the tenancy.
The landlords who come out ahead treat the tenant's housing as their problem strategically, even though it isn't theirs contractually: help the tenant use their own renters Loss of Use well, keep them close to the property, and they're still your tenant when the unit reopens.
Where on-site housing fits
For a landlord who wants the tenant back — or a multi-unit owner with several displaced households — an on-site RV placement is the retention play: the tenant's own renters coverage typically funds it the way it would a hotel, the tenant stays on or near the property with their routines intact, and they watch their own unit get rebuilt rather than falling in love with an apartment across town. On multi-family repairs, placements can scale with the restoration schedule unit by unit.
If you manage rental property and want to talk through a specific loss — FRV on your side, housing on the tenant's — tell us on the request page or start with the ALE housing guide.
Frequently asked questions
Does a landlord get ALE?
Not exactly. A landlord's Loss of Use coverage pays Fair Rental Value — the rental income lost while a covered loss makes the unit uninhabitable — rather than Additional Living Expenses, which reimburses an occupant's increased living costs. The tenant's own renters policy covers their displacement.
What is Fair Rental Value coverage?
Fair Rental Value reimburses the landlord for the rent they would have collected during the period a covered loss makes the unit uninhabitable, up to the policy limit, minus expenses that don't continue. It keeps rental income flowing while repairs happen.
Who houses the displaced tenant?
The tenant's own renters insurance Loss of Use coverage pays for their temporary housing. The landlord's policy covers the building and lost rent, not the tenant's living expenses.
How is Fair Rental Value calculated?
Start from the unit's fair market rent — usually evidenced by the current lease — for the uninhabitable period, minus expenses that stop while it's empty (some utilities, certain services). A vacant-at-loss unit can still qualify at market rate, though carriers scrutinize those claims harder.
Do I still collect rent from my tenant while the unit is unlivable?
Usually not — in many states rent abates for an uninhabitable unit, and many leases release or suspend rent after casualty. That's exactly the income gap Fair Rental Value exists to fill; FRV claims and continued rent collection for the same period don't mix.
Is Fair Rental Value taxable?
FRV replaces rental income, and replaced income is generally treated like the income it replaces — assume it belongs in your rental-income tax conversation and confirm with a tax professional.