Our top pick: Policygenius home insurance
- Personalized policies
- Compare top-rated companies
- Switch online hassle-free
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Loss of use home insurance helps you pay for temporary living expenses when damage to your home and its contents prevents you from living there. It’s designed to cover extra expenses you wouldn’t normally have. For example, if a kitchen fire makes your home unlivable, your family might need to stay in a hotel and eat out for a week while your house is being repaired.
Coverage includes housing for you, your family and your pets while your home undergoes repairs or rebuilding. Loss of use coverage is also called temporary living expenses or additional living expenses coverage.
Loss of use on your homeowner’s policy is meant to pay additional expenses you need while staying at your home away from home, though at a similar quality of life as before.
Let’s say your family of four enjoys cooking meals at home and splurges on eating out only two or three times each month. After your home suffers heavy fire damage, your family gets relocated to a nearby rental home with a full kitchen. Because your rental includes a kitchen, your family can prepare homemade meals as normal.
But if your family splurges more than normal on restaurant meals, you might not get reimbursed by your insurance company.
Your home insurance company will need to classify your own home as unlivable and approve your temporary living situation first. If you feel you must move out right away, you can as long as you understand your insurance company won’t pay out if the damage claim gets denied or if the damage doesn’t qualify as unlivable.
How much loss of use coverage you need depends on your family’s living needs. Consider how much money you would need if your family had to live several weeks or months in a hotel nearby without a kitchen to prepare food. Also, keep in mind that large repairs like rebuilding parts of your house could take a year or more.
With most insurance companies, the amount of coverage included in your policy is based on a percentage of your home’s value, such as 20% to 30%. If your home is valued at $250,000, your loss of use coverage might be set automatically at $50,000 to $75,000.
Loss of use coverage is typically included in your home insurance policy. You might pay more if you increase the coverage amount from the standard offering. However, increasing the coverage can be worth the few extra dollars charged per month if you expect high living expenses.
As long as your insurance company agrees you can’t live in your home because of covered damage, then it should pay for other accommodations. Examples of situations that might be covered include:
You can use your temporary living expenses coverage to supplement costs you wouldn’t normally have while living at home. Costs your insurance company may include in this coverage:
You can receive coverage for your new accommodations once you file the claim for the insured damage, and your insurance company agrees to pay your claim.
To make a claim, you would follow the usual process:
Temporary living expense coverage can ease the pain of suffering major damage to your home. But to receive payments, you need to confirm that your home damage is covered by insurance and that it qualifies as an unlivable situation first. Compare home insurance companies and their policies on loss of use coverage now, so you know what to expect if major damage happens.
You can now calculate your payroll expenses based on gross income instead of net profit. Here’s how it works.
Reduce your debt by around 30% after fees — but only if you can stick with the program. Here’s how.
Here’s where to get financial help for yourself and your business if you’ve been affected by the storm in February 2021.
This fintech just branched out into low-cost life insurance — but its lineup is limited.
Get the skincare you need without taking a trip into your doctor’s office.
Get an incentive to meet your existing health and fitness goals with a discounted premium.
Use your death benefits to help pay for medical expenses while you’re still alive.
Transform your home without leaving insurance gaps while your home’s under construction.
No-cost options are available, but these policies may not offer the coverage you need.
Find out how to apply — plus explore alternatives to deferring your payments.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.