The Role of Insurance Loss of Use & Mid Term Rentals

Understanding Mid-Term Rentals

Mid-term rentals (MTRs) have emerged as a powerful alternative to short-term vacation stays and traditional long-term leases. Defined as furnished rentals available for 30 days or more, these properties cater to a wide range of tenants, including traveling professionals, relocating families, and insurance-displaced homeowners.

For property owners and real estate investors, mid-term rentals offer a steady, high-yield income stream with fewer turnovers compared to short-term rentals, making them an attractive option in today’s rental market.

The Role of Mid-Term Rentals in Temporary Housing

A growing demand for temporary housing solutions has positioned mid-term rentals as a critical component in the housing ecosystem. People often need a place to stay for weeks or months due to circumstances like:

• Home Insurance Claims (Loss of Use - Coverage D): When a home becomes uninhabitable due to fire, flood, storm damage, or other covered perils, insurance policies typically include Loss of Use (Coverage D) to provide alternative housing.
• Relocation for Work: Many professionals—such as traveling nurses, consultants, and remote workers—require furnished, flexible housing.
• Home Renovations & Repairs: Homeowners undergoing extensive renovations often seek temporary housing without committing to a 12-month lease.
• Disaster Relief & Emergency Housing: In the wake of natural disasters, entire communities may be displaced, requiring a surge in mid-term rental availability.

Loss of Use (Coverage D) & How It Works

Loss of Use (Coverage D) is a provision in homeowner’s insurance policies that covers additional living expenses (ALE) when a policyholder’s home is rendered uninhabitable due to a covered peril such as a fire, storm, or plumbing failure.

How Insurance Covers Temporary Housing:

• Hotel Stays vs. Mid-Term Rentals: Initially, insurance may cover short-term hotel accommodations. However, for longer displacement periods (weeks to months), insurers prefer placing families in furnished rental homes that offer space, kitchens, and a more home-like environment.
• Direct Billing to Insurance Companies: Some mid-term rental providers work directly with insurance companies to bill ALE funds, reducing financial stress for displaced homeowners.
• Flexible Lease Terms: Unlike traditional rentals, mid-term rental agreements allow tenants to extend or end their stay based on claim processing timelines.

Why Mid-Term Rentals Are the Best Solution for Loss of Use Claims

1. Comfort & Normalcy – A family experiencing displacement finds it easier to adjust to a temporary home rather than living in a cramped hotel room.
2. Cost Savings for Insurers – Compared to high hotel rates, mid-term rentals provide better value while offering essential amenities.
3. Seamless Relocation Process – Many mid-term rental providers partner with insurance adjusters to streamline housing placements.

How Property Owners Can Benefit from Insurance Displacement Rentals

For real estate investors and landlords, catering to insurance-displaced tenants is a profitable and stable niche within the mid-term rental market. To position your rental property for insurance housing placements:

Steps to Attract Insurance-Funded Tenants:

1. List Your Property with Insurance Housing Networks – Platforms like CRUHomes connect landlords with insurance relocation companies.
2. Offer Flexible Lease Terms – Month-to-month agreements ensure policyholders aren’t locked into a contract longer than necessary.
3. Provide Mostly Furnished Homes – Insurance companies prefer move-in-ready properties that eliminate the need for tenants to purchase temporary furniture.
4. Direct Billing Capability – If possible, work with an insurance liaison to handle direct payments instead of waiting on tenants to be reimbursed.
5. Be flexible with your security deposit. CRUHomes carries corporate liability insurance to assist with any potential damages. In most instances, we think that $2000 for a security deposit is reasonable.

The Future of Mid-Term Rentals in Temporary Housing

The mid-term rental model is here to stay, especially as insurance claims, corporate relocations, and remote work trends continue to grow. By understanding Loss of Use coverage and aligning rental properties with temporary housing needs, investors can secure consistent, high-paying tenants while providing a valuable service to families in transition.

Whether you're an investor looking to optimize rental cash flow or a homeowner searching for a temporary place after an unexpected event, mid-term rentals offer the perfect blend of flexibility, comfort, and financial security.

Want to Learn More?

If you're a property owner interested in renting your home to insurance-displaced tenants, get your free listing at CRUHomes.com and connect with pre-qualified renters in need of temporary housing solutions.

‍