In the event an apartment attached to the insured's home is damaged and unlivable, what percentage of Coverage A does the HO-3 provide for the rental value?

The HO-3 policy, which is a type of homeowners insurance commonly used in the United States, provides certain coverages for the insured's home and additional structures or spaces on the property. When it comes to rental properties, if an apartment attached to the insured’s home becomes damaged and unlivable, the HO-3 policy offers a specified percentage of Coverage A, which pertains to the dwelling itself, to cover the loss of rental income.

In this case, the policy allows for up to 30% of Coverage A to be allocated for loss of rental value if the property becomes uninhabitable due to a covered peril. This provision is especially pertinent for homeowners who may rent out part of their home, as it provides a safety net for lost income during the time it takes to repair and restore the apartment.

The rationale behind setting this percentage is to ensure that homeowners have adequate financial support during periods when their rental property cannot generate income, thus mitigating the financial impact of unforeseen damages.