Loss of Use CoverageLoss of use coverage can be one of the most important parts of your policy. In the event that the dwelling becomes unfit to live in a coverage called loss of use can be used. Loss of Use can be broken down into two parts, depending on the occupancy of the home.

Additional Living Expense – If the home is your primary home, then in the event of a claim you will probably have to move out and live in a hotel or rent an apartment for a period of time. You will probably eat out more than you would normally because you don’t have a kitchen. Those expenses can add up quickly. Additional living expense can help with this additional cost. Now, before you get any great idea, there are limits and daily limits on this coverage. The idea is that insurance company helps maintain your standard of living, not elevate it. So if you don’t stay at the Ritz Carlton today, its probably not going to be paid for by the insurance company.

Loss of Rent – If you rent out your home and there is a claim this coverage will actually pay the fair rental value (the rent you would have received) had it not been vacant because of a claim. For those that use the cash flow of the rental  as living expenses, this can be just as important as getting the home repaired.

While this coverage is often overlooked, it is extremely important, as time to fix a home always takes longer than expected, and if you don’t have sufficient coverage you can be paying for it out of your pocket.