What is Loss of Use Coverage?

May 18 03:31 pm

What is Loss of Use Coverage on a Home Insurance Policy?

Loss of Use also called Additional Living Expense pays the necessary increase in living expenses required to maintain your family's current standard of living while your house is being repaired due to a Covered Loss.

Examples of Loss of Use:

  • the cost of hotels or temporary apartments,
  • food bills in excess of your normal grocery and restaurant bills,
  • cooking supplies and
  • the cost of moving property into storage.

Loss of Use in Action

On most policies, Loss of Use will be limited to 10-20% of the Dwelling coverage. For example, if you have $150,000 in Dwelling coverage, 10% would limit you to $15,000 of Loss of Use for an entire year! For a condo, you get 40% of Personal Property coverage, so $30,000 of Personal Property would yield only $12,000 in Loss of Use.Another variable to keep in mind is how long repairs may take. If your repairs last more than 3 months, you might not want to rent rooms at the Ritz or have your meals at expensive restaurants, so plan accordingly. If you are renting to tenants, Loss of Use can be used to replace lost rent, double check your policy or contact your Agent if you are unsure. If your home suffers a loss that makes it uninhabitable, rest assured that the Loss of Use coverage in your Home policy can help you when you need it most.

For more information, please contact us and we will be happy to help you.

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