What does loss of use cover?
Loss of use pays what’s necessary to maintain your standard of living while your residence is being repaired or rebuilt. It’s important to note that loss of use covers the excess of what you normally spend for certain things. For instance, let’s say your home is being repaired for water damage. You’re unable to cook, so you’ve been dining at the hotel restaurant. You normally spend $300 a week in groceries, but your tab at the restaurant was $600. Your loss of use coverage would take care of the difference—$300. Typically, there is no deductible on loss of use coverage.
Examples of loss of use/additional living expenses:
- Temporary housing (hotel or rental home)
- Additional fuel costs
- Food (groceries, restaurants, cooking supplies)
- Boarding of pets
- Laundry and dry cleaning
- Moving costs
Limits on loss of use coverage
On a homeowners policy
Loss of use is often restricted to 10%—20% of your dwelling coverage, which is the amount on your policy to repair/rebuild your home. For example, if you have $200,000 for dwelling coverage, then you would be covered up to $20,000—$40,000 on a loss of use claim.
On a condominium policy
Limits for loss of use on condo insurance work similarly to a homeowners policy. Some condo insurers will combine your dwelling coverage and personal property coverages. For example, if you have a $60,000 limit for your dwelling and a $30,000 limit for personal property, then you’ll get 20% ($18,000) of the combined $90,000.
On a renters policy
Depending on your insurance company, it can be a flat amount (between $3,000 and $5,000) or a percentage of your personal property coverage. At ASI, one of the insurers in Progressive’s network and part of our family of companies, you’re covered up to 40% of your personal property limit. That means if you have $100,000 in personal property coverage, ASI will pay up to $40,000 on your claim.
Loss of use coverage on a rental property
Landlords are eligible for reimbursement of lost rental income through their loss of use coverage on a rental property. As always, this applies to covered loss only, up to the policy’s limits. A covered loss just means something your insurance company pays for or “covers.”
Pro tips for loss of use claims
Check your limits: Some insurers only offer loss of use coverage for a certain amount of time after a covered loss. This may depend on your state, so check with your insurer to see if any time limits apply.
Know what expenses qualify: Generally, you’re only covered for expenses that are considered “normal.” That may be hard to know, so you’ll want to ask your insurer in advance if your expenses qualify. Additionally, if you plan on staying at a certain hotel while your home is being repaired, check with your insurer to make sure there won’t be any reimbursement issues for that hotel.
Keep receipts for all your additional living expenses: Documentation is critical as your insurer determines your reimbursement amount.
Continue to pay your mortgage or rent: Loss of use coverage will not cover your mortgage or rent payment while your home or residence is being repaired or rebuilt.
Ask for help: If you need assistance finding a place to stay, your insurance company can usually help. At Progressive, we’re happy to recommend options. Being displaced from your home is never easy, and our claims representatives can help ease the transition.