Being forced out of your home by fire, storm, or other disaster is stressful, inconvenient, and expensive. In such an unfortunate event, your home insurance can be a lifesaver. Loss of use coverage gives you peace of mind if your home becomes uninhabitable. Instead of paying out of pocket, your insurer will help cover the extra costs.
Learn more about what is loss of use coverage, what expenses it covers, and how to file a claim.
What Loss of Use Coverage Includes
A loss of use policy is often part of standard home insurance coverage. It covers temporary housing costs and additional living expenses if you can’t stay in your home because of an incident covered in your policy.
If you rent out a part of your home and it becomes unlivable, this coverage might also reimburse you for the rental income you’re missing out on.
Temporary Housing Expenses
With loss of use coverage, the cost of a place to stay while your home’s being fixed may include hotel stays, short-term rentals (such as a home, condo, or apartment), or any other form of temporary accommodation.
Additional Living Expenses
Loss of use also covers additional living expenses you incur while displaced, such as payments for:
- Fuel
- Utilities (internet, electricity, water, etc.)
- Groceries
- Laundry
- Parking
- Pet care
- Transportation
With this coverage, your insurance only pays for the extra costs beyond what you would normally spend. For example, if you spend $500 eating out in a month when you would typically spend $200 on groceries while at home, your policy may cover the $300 difference.
Policy Limits and Duration
Loss of use coverage usually offers 10%, 20%, or 30% of your dwelling coverage — the part of homeowners insurance that protects your home’s structures (foundation, walls, roof, garage, HVAC, cabinets, etc).
For example, if your dwelling coverage is $400,000 and your policy includes 10% loss of use coverage, you could claim up to $40,000 to help cover temporary housing and extra living expenses when your home becomes unlivable due to a covered event. You can often increase this coverage amount. But doing so will raise your premiums, which in turn increases your homeowners insurance cost.
Some insurers don’t just set a dollar limit. They also limit the duration of the loss of use coverage. For instance, you might get a maximum of $40,000 in coverage, but only for up to 12 months, even if your home takes longer to repair.
How Different Providers Handle Loss of Use Coverage
There are many homeowners insurance companies and each has a unique way of handling loss of use, especially when it comes to the coverage limit and claims process.
To get accurate home insurance quotes, compare custom homeowners insurance rates. Here is a brief comparison of some of the top home insurance providers:
| Provider | Is loss of use included in the standard policy? | Coverage limit | Claims process |
|---|---|---|---|
| Progressive | Yes | Typically 10% or 20% of dwelling coverage | File a claim on the provider's website, Progressive app, or over the phone, then track its status online. |
| Liberty Mutual | Yes | The maximum amount specified in the policy | Log in to your account on the provider’s website to start and track your claim. |
| Travelers Insurers | Yes | About 20% to 30% of dwelling coverage | To file a claim, a Travelers claim expert must first pre-approve your additional living expenses. |
When To Consider Adding or Increasing Loss of Use Coverage
Not all insurers include loss of use coverage in their standard homeowners policies. If yours does not, you may want to consider adding it to your home insurance. Either way, be aware that there’s usually a limit on how much you can claim. You might want to increase that limit when:
- You have a large family in your home, which means high living expenses that your current loss of use coverage might not sufficiently cover.
- You own a high-value home that would take longer to rebuild or repair.
- You live in an area where the cost of temporary housing, such as hotels or rentals, is high.
How To File a Loss of Use Claim
Here’s how to file a loss of use claim, step by step:
Step 1: Contact Your Insurance Company
Many insurers allow you to start your homeowners insurance claim online via a portal on their website or through an app. Others require you to call an agent or claims professional. Once you reach out, you will fill out forms explaining what happened to your house (fire, storm, water damage, etc). Loss of use coverage will kick in only if the incident is covered in your policy.
Step 2: Ask What Documentation is Necessary
Tell your insurance agent that you can’t stay in your home and need help with temporary housing and living expenses. Ask them what information they’ll need to process your loss of use claim. Insurers require receipts.
Step 3: Track Your Spending
Have a clear, verifiable estimate of your usual living expenses at home. Most importantly, keep all receipts for anything you spend while you’re living away from home. Organize them by date for easy reference.
Step 4: Provide Documents on Request
When a claims adjuster asks you to substantiate your expenses, you must provide receipts. After they review and approve your expenses, your insurer will reimburse you for the eligible additional living costs.
Customized Home Insurance Comparisons for Your Needs
Looking for the most affordable home insurance that includes loss of coverage? Insurance varies a lot by zip code and a homeowner’s profile. The best way to get the right insurance is to compare custom options.
With EverQuote, comparing custom home insurance is always free and quick. Get personalized quotes today.