Loss of Use coverage, or Additional Living Expenses coverage, will cover living expenses for you while your home is being repaired, rebuilt or temporarily uninhabitable. Loss of use insurance is intended to cover the difference of any additional expenses you may have due to temporary relocation.
How much loss of use insurance should I have?
You should have 20-30% of your home insured value. For example a home that is insured for $400,000 should have loss of use coverage from $80,000 to $120,000.
There are three types of Loss of Use coverage:
- Immediate: an advance against total settlement claim for necessities
- Normal Living Expenses: use this worksheet to determine your normal expenses
- Highly recommended
- Rental Property: loss of use protection for your rental property
What does loss of use insurance cover?
Loss of use insurance will cover:
- Hotel expenses
- Additional gas or rental car expenses
- Public transit
- Rent for a temporary apartment
- Storage units
- Parking costs
- Boarding a pet
Keep in Mind:
This policy often has strict limits and only includes pre-existing and immediate expenses. To be sure you have enough coverage, track and take inventory of your expenses!
- Hang on to all of your receipts!! You will only be reimbursed after the expenses have already accrued.
- Your deductible will likely be waived (yay!)
- Loss of Use does not include coverage in case of:
- Flood, earthquake or pests – However, additional coverage is available for these!