What Is Loss Of Use Coverage?

Last updated: June 9, 2023


Insurance can seem like a complex maze of jargon and small print. One misunderstood aspect is “loss of use” coverage. Ever wondered what would happen if you couldn’t live in your home due to a covered insurance event? That’s where the loss of use coverage comes into play; read on to know more.

What is Insurance Coverage?

In the broadest sense, insurance coverage protects an individual or entity from potential financial losses. It’s a contract (policy) where an insurer agrees to pay for specific types of damages or loss in exchange for premium payments.

The Basics of Homeowners Insurance

Homeowners insurance is a specific policy designed to protect your home from various threats, like fire, theft, and natural disasters. To fully grasp the concept of loss of use coverage, you should understand the overall structure of your homeowner’s insurance.

Understanding the Policy

Your policy consists of several coverages, each with its unique purpose. Dwelling coverage for the structure, personal property for your belongings, and liability for legal issues are just a few examples. Then there’s loss of use coverage, an often overlooked but invaluable part of your policy.

Role of Loss of Use Coverage in Homeowners Insurance

Consider it your safety net if your home becomes uninhabitable due to a covered event. It covers additional living expenses when you can’t live in your home. Loss of use coverage, also known as Coverage D in your homeowner’s insurance policy, can save the day when the unthinkable happens and your home is temporarily off-limits. It covers the additional costs you’d incur to maintain your normal standard of living.

Key Aspects of Loss of Use Coverage

When Does Loss of Use Coverage Apply?

Loss of use coverage kicks in when a covered peril makes your home uninhabitable. Covered perils usually include events like fires, windstorms, or severe water damage.

What Does Loss of Use Coverage Pay For?

From hotel bills, and restaurant meals to laundromat charges – it covers any reasonable increase in living expenses while your home is being repaired or rebuilt.

Specifics of Loss of Use Coverage

It also pays for any rental income lost if part of your home was rented out. Your policy will detail the specifics, including dollar limits or time constraints.

Benefits of Loss of Use Coverage

Peace of Mind During Disasters

Imagine a fire leaving your home uninhabitable. Amid the shock and stress, the last thing you need is to worry about finding temporary accommodation or how to pay for your meals. Loss of use coverage offers the reassurance that these costs are covered.

Financial Stability

Without loss of use coverage, you may be paying for temporary housing on top of your regular housing expenses, such as your mortgage. By covering your additional living expenses, loss of use coverage protects you from this financial strain.

How to Get the Most Out of Your Coverage

Be aware of your policy terms and communicate promptly and openly with your insurer in the event of a claim. Keep receipts of all your additional expenses as these will be required when you make a claim.

Limitations and Exclusions of Loss of Use Coverage

Understanding the Limits

Just like other coverages, loss of use has its limits. There’s typically a limit based on a percentage of your dwelling coverage, and there could be time constraints too.

Common Exclusions

It’s also important to understand what isn’t covered. Loss of use doesn’t apply if your home is uninhabitable for a reason not covered by your policy, for example, a flood if you don’t have flood coverage.


Does every homeowner’s policy include loss of use coverage? 

Most standard policies do, but always check your specific policy details.

Does loss of use coverage apply to renters insurance? 

Yes, loss of use is typically included in renters insurance too.

Are there any time limits on loss of use coverage? 

It depends on your policy, but some may limit this coverage to a certain time period.

Is loss of use coverage expensive? 

It’s usually a part of your standard homeowner’s policy and the cost is incorporated into your premium.

Can I use loss-of-use coverage for any living expense increases? 

The expense must be directly related to maintaining your standard of living and the result of a covered event.


Loss of use coverage is a critical part of your homeowner’s insurance. It offers you a financial safety net if you cannot live in your home due to a covered event. Understanding its benefits, limitations, and when it applies ensures that you’re not caught off guard should disaster strike.

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