Loss of use insurance

What is loss of use coverage?

Loss of use insurance can help pay for the additional living expenses you take on when a covered home insurance claim makes your home uninhabitable.

Think about the last time you stayed away from home. Chances are you had to line up a place to stay and pay to eat at restaurants or order takeout. If your trip was long enough, you likely had to handle other necessities, like going to the laundromat, etc.

That's similar to what happens when you are forced to stay away from home while it's being repaired. So say your home is damaged by a fire, and you can't live there while repairs are underway. Coverage D in your home insurance policy can pay for additional living expenses, such as the cost of:

• Renting a place to stay
• Buying groceries
• Getting takeout
• Doing laundry
• And more

Loss of use coverage is usually available for 12 months or how long it takes to make your dwelling inhabitable – whichever comes first.

What does loss of use coverage cover?

This portion of your home insurance policy can usually pay for:

• Temporary accommodation, for example a hotel, apartment or motel
• Transportation costs
• Pet boarding
• Grocery or restaurant bills spent in addition to your regular level of expenditure
• Relocation costs of your personal belongings
• Laundry expenses
• Parking fees

Again, these expenses can be covered only up to the limits of your policy and only for the duration your policy states (usually 12 months).

What doesn't loss of use insurance cover?

Loss of use coverage typically won't pay for:

• Your mortgage
• Loss of rental income beyond the period it takes to repair or rebuild your home

It also won't pay for additional living expenses when your home is made uninhabitable by an event your home insurance policy doesn't cover, like earthquakes.

When does loss of use coverage kick in?

To draw on your loss of use coverage, your home must be made uninhabitable by a peril your home insurance policy covers, such as:

• Fire
• Windstorm
• Vandalism

Typically, if your home is undamaged but you still can't access it because of a government mandate or a civil authority, this coverage won't kick in. An exception may happen if a civil authority prohibits the use of your home as a result of direct damage to neighboring premises. In those cases, you may be entitled to two weeks of additional living expenses coverage and/or fair rental value reimbursement.

This coverage won't be effective if your home is uninhabitable because of flood damage.

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