Understanding Loss of Use Coverage When You Can’t Go Home

what is loss of use coverage

Loss of use coverage is fairly standard on homeowners insurance policies. Unfortunately, many people fail to recognize just how critical this type of insurance coverage is. With storms raging and wildfires burning out of control across the country, it is more important than ever to understand the strong needs for this specific insurance coverage.

You buy home insurance to cover the costs of repairing or replacing your home and your possessions when disaster strikes. Whether you’re facing weather-related damage or damage from things like fire, vandalism, malicious mischief, or other covered events, your insurance will pay for the necessary repairs (minus appropriate deductibles) and replace or repair lost or damaged possessions. If your home is a total loss, your insurance will cover that as well – up to your coverage limits.

Where does Loss of Use Coverage Come into the Picture?

When your home is damaged, you might not be able to return to your home while repairs or being made. In the case of widespread devastation, you may not be cleared to return to your home for days, weeks, or even months after the event. During this time, you will need alternative living arrangements. But, you will continue to need to pay your mortgage.

You may even be facing time off work as businesses in your community recover or so you can deal with the many details necessary to see to when rebuilding your home and replacing your possessions. Money may be very tight during this trying time.

What You Need to Know about Loss of Use Coverage

Loss of use coverage offers a solution to help you arrange for a hotel or rental unit while repairs are being made to your home. This money is intended to help you recover, but it does not provide for 100 percent of your living expenses while your home is being repaired.

The facts about your coverage are a little more complex and will vary from one policy to the next. That is why it’s always best to read the small print. Some policies offer maximum loss of use coverage equal to a percentage of your total coverage (often 20 percent) while others offer a flat-rate dollar amount related to their loss of use coverage.

In all policies, loss of use coverage is only offered for events that are explicitly covered by your insurance policy. In other words, loss of use due to flood, is not typically covered by your homeowner’s insurance policy.

Work with a trusted independent insurance agent to find the right combination of protection and price to meet your needs and to get answers to all your loss of use insurance coverage questions.

If you have more questions about understanding loss of use coverage when you can’t go home, contact us here at BOLT Insurance Agency1-800-216-4171