When you get homeowner's insurance, you get an entire bundle of different coverage types. One of the standard parts of most home insurance policies is the loss of use coverage, which is also referred to as additional living expenses. It is important to understand how this portion of your coverage works.
Thing #1: Applied When You Can't Live in Your Home Due to a Covered Peril
Loss of use coverage is designed to cover your essential costs if you can't live in your home due to a covered peril event. For example, if your roof was ripped off your home due to a strong windstorm, and you needed a place to stay while your home is being fixed up, your additional living expenses coverage will apply. Other common examples include when your home is damaged by a fire or vandalism.
If something harms your home, and your home has to be repaired or rebuilt, your loss of use coverage will kick in.
Thing #2: Covers Living Expenses When You Can't Live in Your Home
Loss of use coverage is designed to cover your living expenses when you can't live in your home. This portion of your insurance will cover things such as residency expenses, be it renting a few motel rooms for your family, or renting a long-term home rental or apartment.
If the repair can be completed in a short period of time, they will generally cover a hotel or short-term vacation rental. If it will take months for your home to be repaired, your insurance will cover your rent.
If you have to pay any parking fees where you are staying, those will be covered as well. If you have to pay any money to remove items from your home and put them into storage while it is being repaired, the moving and storage should be paid for as well.
If you don't have access to the laundry room, your insurance will pay your expenses at a laundry mat.
Thing #3: Covers Excess Expenses When You Can't Live in Your Home
Your loss of use coverage will also pay to cover any excess expenses you incur that go above your normal budget.
For example, if you normally spend $200 a month on food, but you end up spending $350 a month on food because you have to eat out more or you have to replace food staples that were destroyed in your home, your insurance would cover the additional $150 that you spent above your normal $200 a month food budget.
If you have a pet, and you have to board your pet while your home is being fixed, that would also be an excess expense that would be covered.
Check your homeowner's insurance policy in order to under your loss of use coverage. This is an important and overlooked part of your homeowner's insurance coverage that you need to make understand.Share