What type of coverage under Michael's dwelling policy compensates him for lost rental income while repairs are made?

The correct answer is associated with Coverage D - Fair Rental Value, which is designed to compensate property owners for lost rental income due to a covered loss that makes the property uninhabitable. If a tenant cannot live in the rental property because of damage, this coverage ensures that the property owner does not suffer financial loss during the repair period.

Coverage E - Additional Living Expenses, on the other hand, is focused on covering the costs that the policyholder incurs for their own living expenses when they are temporarily displaced from their primary residence. Coverage A deals with the structure of the dwelling itself, covering the cost of repairing or rebuilding the home after a loss. The option indicating that the situation is not covered does not apply, as Fair Rental Value coverage specifically addresses the loss of income resulting from an inability to rent out the property.

In summary, Fair Rental Value within Coverage D provides essential protection for landlords like Michael, ensuring they can recover lost income when their rental property is under repair.