If your home becomes unlivable due to a covered event like a fire or tornado, where would you stay? How would you cover extra expenses? This is where loss of use coverage comes in, helping homeowners manage unexpected costs while their home is being repaired.
1. What is Loss of Use Coverage?
Loss of use, also called additional living expenses (ALE) coverage, is a part of most homeowners insurance policies. It covers extra expenses if a covered disaster forces you to temporarily move out of your home.
For example, if a fire damages your home and you need to stay in a hotel while repairs are underway, your insurance can cover those extra living costs.
2. What Does Loss of Use Cover?
Loss of use typically helps with:
✔️ Temporary housing costs (hotel stays, rental homes, etc.)
✔️ Increased food expenses (if you have to eat out more than usual)
✔️ Transportation costs (if you need to commute further)
✔️ Pet boarding (if your temporary home doesn’t allow pets)
3. How Much Loss of Use Coverage Do You Have?
Most home insurance policies include loss of use coverage worth 20% of the home’s insured value. This means if your home is insured for $300,000, your loss of use coverage would typically be $60,000. However, coverage limits may vary by insurance provider.
4. When Does Loss of Use Apply?
Loss of use applies only if your home is unlivable due to a covered event. Examples include:
- Fire
- Tornado
- Storm damage
If your home is unlivable due to maintenance issues, personal choice, or an uncovered event, loss of use coverage does not apply.
5. How to Make a Loss of Use Claim
If you need to file a claim for loss of use:
1️⃣ Contact your insurance provider immediately.
2️⃣ Keep all receipts for additional expenses.
3️⃣ Review your policy to understand coverage limits and exclusions.
For more details, check out this helpful guide from Nationwide.
Conclusion
Loss of use coverage provides financial relief when your home is temporarily unlivable due to a covered event. Understanding your policy can help you stay prepared for unexpected situations.For more information on homeowners insurance, contact New Frontier Insurance today.
Leave a Reply