Which of the following is true about TFPA Tenant Policies?

The correct answer highlights a key aspect of TFPA (Texas Fair Plan Association) Tenant Policies, specifically regarding coverage of improvements made by tenants. Tenant policies typically provide coverage for tenant improvements, but this coverage often comes with predefined limits. This ensures that while tenants' investments in upgrades or modifications—a common practice in rental properties—are protected, there is a cap on the insurer's liability for these enhancements.

Understanding this aspect is important for both tenants and adjusters, as it directly impacts the extent of coverage available in the event of a loss. The limited coverage encourages tenants to be aware of the value of their improvements and provides a framework for insurance claims related to them.

The other options do not accurately reflect the nature of TFPA Tenant Policies. Coverage for only permanent fixtures would overlook other significant aspects of tenant improvements. Stating that all named perils are covered does not align with the specific terms of TFPA policies, which often have exclusions. Lastly, while Additional Living Expense (ALE) coverage is crucial for many tenants, it is not a universal feature of TFPA Tenant Policies and may not be included in all situations, making the claim inaccurate.