Homeowner’s Insurance: What Is Loss Of Use Coverage?
October 13, 2020

Homeowner’s Insurance: What Is Loss Of Use Coverage?

a large lawn in front of a house


In the unfortunate event that your home is badly damaged or destroyed by fire or a weather-related natural disaster, you will likely have to temporarily relocate while that damage is fixed or your home is benign rebuilt. It can be pretty expensive to find temporary housing for your family during this time, not to mention stressful. You’ll have moving expenses, living expenses, and food expenses. If you have pets then you might have pet boarding as well if you cannot find a temporary place to live that takes pets. That’s where the loss of use insurance coverage comes into play.

Let’s say your home is damaged in a fire. It will take two weeks of repairs before it is safe for you to move back in. Your family of three stays in a hotel for two weeks but your home insurance covers the cost. That’s an example of loss of use coverage helping you out in your time of need.

Explaining Loss Of Use Coverage

Loss of use home coverage helps pay living expenses while your home is being repaired following a covered disaster. It’s designed to help you keep your current standard of living during this time.

Your insurance might pay for the following accrued loss of use expenses:

  • Hotel or motel stay
  • Food, groceries, restaurant bills
  • Storage fees
  • Fuel for moving
  • Parking fees
  • Pet boarding
  • Transportation

In general, the amount of loss of use coverage you have is 20 to 30% of your dwelling coverage limit. If your dwelling was worth 500,000 then 20% of that would be $100,000and that is the most your insurance would pay for loss of use. In general, you will save your receipts and get reimbursed by the insurance company. There might be limits put in place by your insurance company that caps the dollar amount of the nightly cost of accommodations or the number of total days covered. These limits are imposed to keep the costs from rising too quickly and your policy running out of funds before it is safe for you to return home.

Do Renters Also Get Loss Of Use Coverage?

If you have a renter’s insurance policy it might also cover loss of use in the event your apartment building is damaged in a covered disaster. You’ll have to check your policy to see the exact dollar amount and daily expenses that are covered. Landlords also have similar protection that can reimburse them for a fair rental price during the time the property isn’t inhabited and being paid for by the renter.

Remember, your homeowner’s insurance can help you get back on your feet after a disaster. Keep up to date on what your policy covers and make sure that you have enough coverage with a yearly check-in. You can compare plans and check rates yearly as well to make sure you still have the best deal that covers all your needs

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Tags: home insurance, homeowners, homeowners insurance

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