Understanding Loss of Use Coverage in Home Insurance Policies

Loss of use coverage, often referred to as additional living expenses (ALE) coverage, is usually included in home insurance policies. This coverage can offer financial support if your home becomes unlivable due to a covered event, such as a fire, storm damage or other disasters. In essence, it can help you sustain your standard of living while your home is being repaired or reconstructed.

What Does Loss of Use Coverage Include?

Loss of use coverage typically includes expenses such as temporary housing, food, transportation and other costs that arise from being displaced from your home. For example, if you need to stay in a hotel while your home is being repaired, the expenses for this accommodation may be covered. Additionally, if you incur extra costs for meals because you can’t cook at home, these expenses may also be reimbursed.

Limits and Duration

It’s crucial to recognize that loss of use coverage has limitations and may not cover all expenses indefinitely. Most policies cap the amount they will pay, which is usually a percentage of your dwelling coverage. For instance, if your home is insured for $300,000, your loss of use coverage might be capped at a percentage of that value. The coverage duration is typically limited, often up to 12 months, although this can vary based on the insurer and your policy details.

How to File a Claim

You need to file a claim with your insurance company to utilize loss of use coverage. Maintaining detailed records and receipts of all expenses incurred due to displacement is vital. Your insurer will review these documents to determine the reimbursement amount. Prompt communication with your insurance agent can help you expedite the process and receive the necessary support.

Learn More

To discuss loss of use coverage and home insurance policies near you, contact Orbit Insurance & Multiservice.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.