Martha's home includes a separate apartment on the second floor that she rents to others. An accidental grease fire in the tenant's kitchen causes significant damage to the apartment and the rest of the house. Martha and her tenant have to move out until the house can be restored. Which one of the following is correct with respect to how Martha's homeowners policy would respond?

Martha's home includes a separate apartment on the second floor that she rents to others. An accidental grease fire in the tenant's kitchen causes significant damage to the apartment and the rest of the house. Martha and her tenant have to move out until the house can be restored. Which one of the following is correct with respect to how Martha's homeowners policy would respond? 



A. The fire damage would be covered, but the lost rental income would not be covered because it is an indirect loss.
B. Martha's extra expense coverage would pay for temporary accommodation for her and her tenant during the repairs.
C. The "fair rental value" coverage in Martha's homeowners policy would cover her loss of rental income.
D. Martha's insurer would deny coverage because the fire originated in the portion of the house rented to others.


Answer: C. The "fair rental value" coverage in Martha's homeowners policy would cover her loss of rental income.

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