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What Does Loss Of Use Mean In Home Insurance

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What Does Loss Of Use Mean In A Homeowners Policy

Does your Auto Insurance Cover Loss of Use?

Loss of usemeaning

. Thereof, what does loss of use protection include?

Loss of use coverage pays for your hotel/living and meal expenses if you’re unable to live in your home due to a covered loss. It’s also known as additional living expenses and is often included at no extra cost on your homeowners, condo, or renters insurance policy.

Additionally, can you sue for loss of use? When a third-party tortfeasor negligently or intentionally causes damages to a vehicle, the owner usually has a right to sue that person or entity to recover for the physical damage to his or her vehicle. In most states, the owner also has the right to recover damages in tort for loss of use of the damaged vehicle.

Similarly, is loss of use protected by homeowners insurance?

That’s where loss of use insurance kicks in. Also referred to as additional expenses insurance or part D coverage, loss of use homeowners insurance covers living expenses that you incur if your home is deemed uninhabitable as the result of a covered peril.

What is considered loss of use?

Loss of use coverage covers any additional living expenses, meaning any necessary expense that exceeds what you normally spend. For example, you usually spend $300 per month for groceries. While your home is being repaired, you spend $400 a month since you have to dine out instead of cook at home.

What Does Loss Of Use Insurance Mean

Loss of use insurance is a type of policy that covers expenses incurred when the insured cannot temporarily use their property due to damages that render it uninhabitable or an order to evacuate from lawful authorities, such as police or disaster relief teams. Not all property insurance policies include this coverage, but policyholders might be able to add it for an extra premium.

Loss Of Use Coverage In Auto Insurance

As you may have guessed, loss of use coverage isnt always tied to homeowners and their properties. Such coverage will apply for most insurance policies where losing access to something can end up costing the owner money in the long run. A great example of this would be auto insurance.

Imagine this your vehicle has broken down due to an accident and needs repairs. However, because you cannot use your car to get to work, its considered a loss of use, and assuming your auto insurance policy covers it, there are ways to help you get back on the road.

In most cases, this would mean that your insurer pays the rental value for a vehicle that you use while your primary vehicle is being repaired.

There are obviously some restrictions to be aware of. For example, you wont be able to rent a car that is twice or thrice the value of your existing one. Instead, youll need to choose a similar vehicle, or your insurer will not accept your loss of use claim. As such, your loss of use coverage for a rental car will most likely be the same vehicle or one with very similar specifications.

Further Reading

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Getting The Most For Your Insurance Dollar

The premiums charged for homeowners and renters insurance vary widely from company to company, so it pays to take the time and effort to shop around in order to get the best value for your insurance dollar.

The cost of homeowners and renters insurance depends on a number of factors such as location, local fire protection, age and construction of building, choice of deductibles, application of discounts and the scope and amount of insurance coverage you purchase. Under California law, each insurance company calculates its own rates, subject to California Department of Insurance approval. Since each companys loss experience differs, the rates will differ as well. It is wise when shopping to review and compare all quotations to determine if the coverage, deductibles, and limits are similar to each other. Make a list of what is important to you and be sure to discuss it with the agent. To help find competitive rates the CDI is pleased to offer online premium comparisons that cover over 90% of Californias homeowners and renters insurance market. You can receive these comparisons via the CDI Web site at, or by calling the CDI Hotline at 1-800-927-HELP.

How To File A Loss Of Use Claim


The worst has happened.

You’re unable to live in your home, and the additional expenses have left you reeling.

You need help covering the extra costs.

First, gather your receiptsremember that your insurance company will be reimbursing you.

Without proof of your expenses, your claim may not be approved.

Some insurance companies will want you to fill out a general expense sheet when you file your claim before evaluating your expenses.

It’s wise to keep something like this on file, if possible.

Reach out to your insurance company by phone or via their website to file your claim as soon as possible.

Even if you have yet to incur any expenses, they can guide you, let you know what you need, and even recommend helpful actions or contacts to ease your situation.


Zion Financial LLC. “Simply Insurance” is a licensed independent insurance broker. Simply Insurance doesn’t underwrite any insurance policy described on this website. The information provided on this site has been created by Simply Insurance for general informational and educational purposes. We do our best to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application.

3535 Peachtree Road Suite 502-753 Atlanta, GA 30326 | 1-800-683-4854 | Monday – Friday 9:00am – 9:00pm ET | |

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Do I Need To Pay A Deductible When I File A Loss Of Use Claim

Most insurers wont require you to pay a deductible when you file a claim under loss of use coverage. Since loss of use is almost exclusively used simultaneously with a claim for the damage to your home, youll already be paying a deductible for your dwelling and/or personal property coverage.

Just to be certain, you should double check with your insurance company. Any applicable limits should also be clearly written in your policy documents.

What Is Loss Of Use Coverage And What Does It Do

What would you do if an unexpected disaster struck today? Do you know what steps youd take if your home became uninhabitable and you had to find a temporary place to live?

Most people never expect to be hit by a disaster, but it happens every day across the country. Many people have no idea what to do if theyre thrust into that kind of situation. Would you be prepared?

Luckily, your homeowners or renters insurance policy with Universal can help make your recovery from disaster a little easier on you and a lot easier on your bank account with loss of use coverage.

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Water Damage Is Not Standard Coverage Read This

Flood insurance is not a part of your standard home or renters insurance policy. However, your insurance company may offer you to add an endorsement that will protect you from damage caused by water.

Thus, Nationwide and Safeco can cover damage resulting from leaking plumbing and sewer and drainage backups.

Does Loss Of Use Come With A Deductible

Don’t buy rental car insurance – Unless you can’t afford Loss of use

Additional living expense coverage does not have its own separate deductible. Your policy requires you to first pay a deductible that applies to the underlying cause of loss that triggered the additional living expenses.

“If your home burns down, the deductible you pay will apply to the fire loss and not to the loss of use coverage,” explains Andy Jones with COUNTRY Financial.

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Why You Can Trust Bankrate

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and reviewed by subject matter experts, who ensure everything we publish is objective, accurate and worthy of your trust.

Our insurance team is composed of agents, data analysts, and customers like you. They focus on the points consumers care about most price, customer service, policy features and savings opportunities so you can feel confident about which provider is right for you.

  • We guide you throughout your search and help you understand your coverage options.
  • We provide up-to-date, reliable market information to help you make confident decisions.
  • We reduce industry jargon so you get the clearest form of information possible.

All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure were putting accuracy first.

Loss Of Use/temporary Living Expenses Coverage On Homeowners Insurance

If something were to happen to the structure of your home, like fire or storm damage, and you had to temporarily relocate where would you go? Having to temporarily relocate can add up while a home is being repaired or rebuilt. Think about expenses for rentals, moving, food costs and more! Thankfully, your homeowners insurance is equipped to help you with temporary living expenses.

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Limits On Loss Of Use Coverage

On a homeowners policy

Loss of use coverage on home insurance policies typically offer 10% or 20% of your dwelling coverage. For example, if you have $200,000 in dwelling coverage, you’d be covered up to $20,000 or $40,000 in the event of a covered loss, depending on your policy.

On a condominium policy

Typically, condo insurance policies will provide loss of use coverage that is equal to 20% of your combined dwelling coverage and personal property coverage limits. For example, if you have a $60,000 limit for dwelling coverage and a $30,000 limit for personal property coverage, your loss of use coverage limit will be $18,000.

On a renters policy

Depending on your insurance company, loss of use on renters insurance may be a flat amount or a percentage of your personal property coverage. At ASI, one of the insurers in Progressive’s network and part of our family of companies, you’re covered up to 40% of your personal property limit. That means if you have $100,000 in personal property coverage, you will have up to $40,000 in loss of use coverage.

Loss of use coverage on a rental property

Landlords may be eligible to be reimbursed for lost rental income through their loss of use coverage if their tenants are unable to reside in the dwelling due to a covered loss . ASI offers loss of use coverage options of $0, 10%, or 20% of your dwelling coverage.

Civil Authority Prohibits Use

Health insurance

On rare occasions, a civil authority or government may intervene and prevent people from travelling to a certain area. For example, if there is a wildfire in your immediate neighborhood that is threatening your home, your local governmental authority may prohibit people from remaining in their homes and evaluate them. Or, if the government closes a road after a hurricane which you need to get to your house, loss of use coverage can come in handy.

The disaster that causes government intervention must be covered in your homeowners insurance policy. For instance, if your policy covers wildfires, loss of use can cover mandated evacuations. However, homeowners insurance almost never covers flooding, so if a government authority closes a road due to flooding and you cannot get home, your insurance policy most likely wont kick in. Additionally, you are typically only covered for up to two weeks under this part of your policy.

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What Is Loss Of Use Home Insurance Coverage

One of the most useful parts of home insurance coverage is Loss of Use. If ever you are looking into home insurance quotes, it is best that you also weigh in this coverage. Understanding each coverage in your policy will make your home insurance one of your most valuable assets.

What Expenses Are Covered By Loss Of Use

Now you know what loss of use coverage is but how does it work and whats included? Its important to know that there are limits to what and how much loss of use coverage will reimburse you for, but usually its enough to help you maintain your current standard of living.

So what kind of expenses are covered by loss of use insurance? Here are a few types of expenses loss of use coverage includes:

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What Is Covered By Additional Living Expenses

Broadly, there are two situations where ALE coverage applies:

  • Direct damage. The most common use of ALE is to cover your living expenses when your home becomes unfit for living in due to physical damage. For ALE coverage to apply, the damage must come from a peril that your policy normally covers. Fire, for example, is a covered peril in every policy. If fire damages your home, your insurance policy will cover the repairs and your living expenses. Pests, for example, are a commonly excluded peril: if a termite infestation damages your home and you have to vacate while it gets fumigated, most insurance policies would not cover either the damage or the ALE.

  • Civil authority order. If you have to evacuate your home under order of a civil authority, ALE coverage will kick in as long as the cause of the evacuation is something that your policy would cover. If your policy covers fire, evacuations due to a fire would be covered, even if that fire never actually touches your home. If your policy excludes floods, you wont have coverage for damage or for living expenses. In any case, the evacuation order must be an actual order. Advisories or alerts dont count and, if youre leaving your home voluntarily, ALE coverage wont respond.

Renters Loss Of Use Coverage

Proof Of Loss What Does That Mean Rev1

Since renters do not own the property they are living in and do not have dwelling protection for that property, renters insurance offers a separate coverage, rightfully called Loss of Use Coverage, which can be adjusted to suit your needs.

Its always a good idea to contact your Universal agent to find out if loss of use coverage applies to your unique situation before filing a claim.

The editorial content on Universal Propertys website is meant to be informational material and should not be considered legal advice.

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Tips And Advice From Loss Survivors About Ale

Negotiate for coverage under ALE rather than under contents

Our insurance company initially tried to characterize the security deposit for our temporary rental home as a contents coverage claim. We fought them on that point, as the security deposit should be considered ALE. We had to seek assistance from our state department of insurance, but eventually, the insurance company agreed to pay the security deposit under ALE coverage. This was an important point for our claim because our ALE coverage did not have a monetary cap, but we were underinsured on the contents claim.

Find out if you have an ALE monetary cap

You should verify whether your homeowners policy does or does not contain an ALE monetary cap. Many people have the instinct to conserve and scrimp to make ALE last, thinking theres a limit, but many policies do not contain an ALE monetary cap.

Reduce Stress

Repairs and/or reconstruction can be a long haul, and a challenging process to endure, so reducing the stress of your temporary living situation is critical. If a family of 4 or 5 is crammed into a 2 bedroom apartment for 18 months when they are accustomed to living in a 5 bedroom home, thats an important factor to consider.

Take what you are entitled to

Get organized: Save your receipts and track your purchases related to ALE

Corporate apartments: Not just for corporations!

You might be able to get a lump-sum ALE payment up front

Other Home Insurance Coverages In A Standard Policy:

A standard home insurance policy generally includes the following six main forms of coverage. Because Loss of Use isnt used as often as other types of protection such as dwelling or personal property, it is sometimes forgotten.

Make it a point to familiarize yourself with all major forms of coverage now. That way, you can receive the protection you need when theres a problem.

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What Is Covered Under Loss Of Use Insurance

Covered costs include items above and beyond what you normally would pay for before your home was damaged. Hotel or rental bills, necessary restaurant meals and food charges, transportation costs and fees to store your possessions are among the likely covered additional living expenses.

“This coverage pays you back for increased living expenses you incur. But the keyword here is ‘increased.’ For example, if you typically ate out every meal before the loss, and then you continue to dine at restaurants for every meal after the loss, these dining charges wouldn’t be covered because you spent at the same rate you did before the loss,” explains Joshua Scott, a Scottsdale, Arizona-based executive general adjuster with The Greenspan Co./Adjusters International.

On the other hand, if you never went to restaurants before the loss but were forced to do so while you were living in a hotel after the loss, the additional cost of restaurant dining could be claimed under your homeowners insurance policy.

How Does Loss Of Use Renters Insurance Work

What Does Homeowners Insurance Cover?

The way loss of use renters insurance works varies, but you will usually be reimbursed for your additional expenses. To be sure you are covered for the maximum amount, you should first determine whether the loss you have experienced is covered under your policy.

There are some things that are not covered under loss of use, says Ken Gregg, CEO and founder of Orion180. He says that in cases like the covered perils mentioned above, loss of use applies.

On the other hand, if your apartment was severely damaged in a flood, renters loss of use coverage wouldnt apply because renters insurance doesnt cover flood damage and flood policies exclude loss of use coverage.

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