The entire purpose of securing good home insurance coverage is to make sure that in an emergency, you don’t have to worry about your financial security. On a large scale, this means the cost for your home and all of the property in it is covered. However, it’s just as important to think out the small costs that you’ll take on if you have a major home emergency. If your home becomes uninhabitable due damages from a covered peril, how much assistance will you get from your home insurance company? The answer depends on your home insurance policy’s loss of use coverage.

What is Loss of Use Coverage?

Loss of use coverage is a part of a home insurance policy that provides for costs a homeowner may incur if he or she has to stay in temporary housing because their home is uninhabitable. This type of coverage, known as “additional living expenses,” pays for hotel stays or a temporary apartment, reasonable food costs, and more. However, this type of coverage only applies when the dwelling is uninhabitable, and it has its limitations. For example, an insurance company may not compensate you for a stay in a four star hotel or a five-course meal if there are less expensive options available. In some cases insurance companies choose the hotels their clients stay in after a loss.

Your regular home insurance policy may not cover the small costs of living outright, unless you pay for additional coverage. So, it’s very important to look at your policy before an emergency situation occurs. This special type of coverage doesn’t cost too much extra (if it’s not already in your policy, of course) and it can provide you with a lot of peace of mind as it ensures that you won’t ever be taking on a lot of costs that you didn’t know about.

It’s also helpful to consider your coverage limit for additional living expenses and how that limit will relate to you and your family. Depending on your policy, you might get a small amount of money for your hotel stay. Generally, the insurance company pays for reasonable costs outside of your normal living expenses up to your coverage limit. This limit is set when the policy is purchased or when you make major changes to your insurance. That means that the company not going to cover something like extravagant meals and four-star hotels, as this would be you taking advantage of the policy. Find out what your home insurance limits are, and take a few minutes to think of where you’d stay and how you’d handle an emergency situation that temporarily forced you out of your home. The extra time you take could make a big difference.

Read your policy over and look for details relating to these additional expenses. Talk to your insurance provider to find out what type of coverage you have, and be willing to ask questions if there’s anything at all that you don’t understand in your policy. Making sure that you’re covered for additional living expenses is easy to do, but as with all types of insurance coverage it needs to be done before an emergency happens.


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