The short answer
What It Pays For
Loss of use coverage, sometimes called additional living expenses, steps in when your home is unlivable due to a covered event like a burst pipe or storm damage. It helps with costs that go beyond your usual bills, such as hotel stays, apartment rentals, or laundry services. This coverage is meant to keep your life as normal as possible while repairs are underway.
You might also get reimbursement for extra food costs if you cannot cook at home, or for moving and storage if you need to move belongings out of the damaged house. The key is that these costs must be necessary because of the damage. Keep all receipts and track every expense, because your insurance company will ask for documentation.
- Temporary housing like a hotel or rental
- Extra meal costs when you cannot cook at home
- Laundry and dry cleaning services
- Storage fees for your belongings
- Moving costs to and from temporary housing
- Pet boarding if your pet cannot stay with you
How Coverage Limits Work
Every policy has a limit on how much it will pay for loss of use. This limit is often a percentage of your dwelling coverage, so a home with a higher dwelling limit might have a larger loss of use limit. That means the insurance company will pay up to that amount for your extra living costs, but only for the time it takes to repair your home.
The time limit is also important. Most policies pay for a reasonable period, often up to 12 or 24 months, but that can vary. If repairs take longer than expected, you might need to ask for an extension, but that depends on your policy. Check your policy or ask your insurance agent about your specific limits and time frames.
Documenting Your Expenses
To get reimbursed, you need to keep careful records of every extra dollar you spend. Save hotel receipts, restaurant bills, and any other expense that comes from being out of your home. Your insurance company will ask for these documents, and without them, your claim could be delayed or reduced.
Take photos of your temporary living space and keep a daily log of what you spend. This might feel like extra work, but it makes the process smoother. Also, note any costs that are higher than normal, like a longer commute to work if your temporary housing is farther away. These details help your claim.
- Save all receipts for housing and meals
- Keep a daily expense log
- Photograph your temporary living space
- Note any extra travel costs
- Record dates and reasons for each expense
What It Does Not Cover
Loss of use coverage does not pay for repairs to your home itself; that is what your dwelling coverage is for. It also does not cover your normal living costs, like your mortgage or utility bills, because you would pay those anyway. It only covers the extra costs that come from being displaced.
It also will not cover expenses that are not necessary or that go beyond what is reasonable. For example, staying at a luxury resort when a modest hotel is available might not be fully covered. Your insurance company expects you to keep costs in line with your normal lifestyle, so choose temporary housing that is similar to your own home.
How to File a Claim
To use your loss of use coverage, you need to file a claim with your insurance company as soon as you know your home is damaged. Provide them with the details of the damage and your temporary housing plans. They will guide you on what documentation they need and how to submit it.
Policies vary, and your insurer decides what is covered. Keep a copy of your policy and review it to understand your coverage. If you have questions, call your insurance agent. For the repair work itself, you might want to hire local water damage pros to assess the damage and start cleanup, which can help speed up the process.
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Call Now (480) 898-4279Frequently asked questions
Do I need to keep receipts for loss of use expenses?
Yes, you should keep all receipts and records of your extra living costs. Your insurance company will ask for proof of what you spent, and without receipts, your claim may be denied. Keep a file with every document.
How long does loss of use coverage last?
The duration depends on your policy. Many policies cover you for a set period, often 12 to 24 months, but that can be shorter. The clock starts when your home becomes unlivable, and it ends when repairs are done or the limit is reached. Your insurer decides the exact length.
Can I choose any temporary housing?
You can choose, but the cost must be reasonable and similar to your normal living situation. Your insurance company may not cover a more expensive option unless it is necessary. Check your policy for any restrictions on housing choices.