Explaining loss of use coverage

Loss of use coverage is part of every standard homeowners insurance policy. While other portions of the policy help pay for repairing your home if it’s severely damaged, loss of use coverage is there for your everyday living expenses while the work is done.

Unfortunately, major home repairs can’t happen overnight, and simultaneously your expenses can increase dramatically. Loss of use coverage can help support you financially until you’re able to move back into your home.

To help you learn more about how home insurance works, here is a basic guide to what your loss of use coverage includes:

Additional living expenses (ALE)

Loss of use coverage includes additional living expenses, or ALE, to help you maintain your normal standard of living while temporarily relocated. The details can vary from one provider to the next, but these are the major types of expenses you can claim from insurance:

• Temporary residence, such as hotel stays or short-term rentals.
• Fuel and transportation costs.
• Rental cars.
• Dry cleaning and laundry services.
• Storage for personal belongings.
• Additional childcare costs.
• Pet boarding.

What else is covered?

Loss of use coverage also provides financial support for loss of rental income. If a room you normally rent out is damaged, fair rental value coverage can temporarily pay rent on behalf of your tenants. Therefore, you’re reimbursed for the payments you would otherwise lose.

One important thing to remember about the fair rental value coverage is that it only covers the rent payments and not the tenant’s personal property. This will be covered by the tenant’s own rental insurance policy.

Loss of use coverage is included automatically in most homeowners insurance policies. However, things like limits and exceptions can vary among providers. The more you understand about the details of your coverage, the more prepared you will be in case you ever need to file a claim.