Where would you go if your home becomes uninhabitable due to a covered loss? Would you be forced to move in with family or friends, or will you have enough resources to pay for a hotel room or an apartment while you are out of your home? This expense may not be a concern if you have loss of use under your homeowner's insurance. What is loss of use, and how does it work? Read on for additional information.
What Is Loss Of Use?
Loss of use, or Coverage D, is standard in most homeowners insurance policies. It is a feature designed to cover any additional living expenses you incur if your home or sections are uninhabitable due to a covered loss.
For example, if a fire damages your home and the smoke and water make your entire home uninhabitable, loss of use may cover the cost of temporary housing. But if your kitchen was only damaged and the rest of your home is livable, your loss of use may only cover additional meal expenses.
What Does Loss of Use Cover?
While housing expenses are often a given, your policy may cover numerous other living expenses. Some of these include the following:
- Additional utility costs
- Additional food costs
- Pet boarding
- Laundry/dry cleaning costs
- Moving expenses
- Storage expenses
The keyword in some of the coverage is additional. If you usually spend $150 per week in food costs, but due to being displaced, you spend $300, your policy will pay the additional $150, not the total $300.
Your policy may also pay additional transportation fees if your temporary housing is further from your work or school. These expenses may include fuel, parking, or even public transportation costs.
How Much Coverage Do You Have?
Most policies state the loss of use coverage on your home insurance as a percentage of your dwelling coverage. Every policy differs, but your coverage may be 10 or 20% of your dwelling coverage.
For example, if you have $300,000 dwelling coverage and 10% use of loss, your policy will cover up to $30,000 worth of expenses. If you have 20% of coverage, your loss of use would cover up to $60,000.
What Will You Need To File A Claim?
Call your home insurance provider for instructions on filing a claim. They will explain what is and is not covered and how to secure reimbursement. For example, some companies will pay the vendor directly for your lodging, while others may require you to pay out of pocket before reimbursement. Still, others may supply a voucher for specific properties.
Make sure you keep all of your receipts for any covered expenses. The company often requires these for reimbursement. Reach out to a home insurance provider near you to learn more.