Loss of Use Insurance Coverage

What Is Loss of Use Coverage?

If a disaster strikes and you have to leave your home during repairs, how would you cover the cost? Your homeowner’s insurance policy includes an important benefit known as “loss of use” or “additional living expense” coverage.

When you need it

Loss of use coverage kicks in when your home becomes uninhabitable after an insured event, such as fire or a windstorm. You also may use it if you must evacuate by order of the law or a disaster response team.

What’s covered

Standard loss of use coverage will pay for additional living expenses while your home is being repaired or rebuilt. Covered expenses might include temporary housing, moving and temporary storage costs, laundry and dry cleaning expenses and more. Check with your provider for the specifics of your policy.

Approving your claim

Note that you need to clear your loss of use claim with your insurance provider, and there can be a bit of a gray area. For example, let’s say your entire home burns down in a fire. In this case, clearly you have a loss of use claim, and your eligibility should be clear to your agent. However, if a fire causes minor damage to your kitchen cabinets, then your insurer might not approve your claim.

Limitations on coverage

Expect your policy to place limitations on benefits, such as a time limit or a percentage of your dwelling coverage. If you choose, you can obtain expanded loss of use coverage for greater benefits.