Loss of Use Coverage
If a fire or storm forces you out of your home, where will you stay? Loss of Use coverage ensures you aren't left paying out of pocket for temporary housing.
What is Loss of Use Coverage?
Also known as Additional Living Expenses (ALE) or Coverage D, Loss of Use coverage kicks in if your home becomes temporarily uninhabitable due to a covered peril (like a fire, severe windstorm, or burst pipe).
While your home is being repaired or rebuilt, this coverage pays for the additional costs of living away from home.
What Does It Pay For?
Loss of Use covers expenses that exceed your normal daily living costs, including:
- Hotel bills or temporary rental home costs
- Restaurant meals (above your normal grocery budget)
- Pet boarding if your temporary housing doesn't allow pets
- Laundry or dry cleaning expenses (if you lack access to machines)
- Storage unit fees for your belongings
- Additional commuting costs if your temporary home is further from work
How Loss of Use Works in Practice
Imagine a kitchen fire makes your Libertyville home unlivable for three months. You normally spend $600 a month on groceries, but living in a hotel forces you to eat out, costing $1,500 a month. Your Loss of Use coverage would pay the $900 difference, plus the cost of the hotel room.
It's important to note that Loss of Use only applies if the damage was caused by a peril covered by your policy. If your home floods and you don't have flood insurance, your standard Loss of Use coverage will not apply.
Coverage Limits
Loss of Use is typically calculated as a percentage of your Dwelling Coverage (Coverage A)—usually around 20% to 30%. For example, if your home is insured for $400,000, you might have $80,000 in Loss of Use coverage. Some policies also impose a time limit, such as 12 or 24 months, regardless of the dollar amount.
Are You Fully Protected?
Make sure you have enough coverage to maintain your standard of living if disaster strikes.
Review Your Policy