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What does loss of use mean in home insurance?
I’m in the process of buying my first home and getting home insurance. I’m a little confused about some of the terms. What does loss of use mean in home insurance?
Sadie Lovemore · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Home insurance policies can be so confusing! When it comes to home insurance, loss of use means that you will be covered if your house is temporarily uninhabitable during a covered repair or rebuild.
Loss of use coverage, also known as additional living expenses (ALE) or
Coverage D
, helps you pay for alternative living arrangements if the damage to your home was caused by an event covered by your policy.For example, if your home burned down in a fire, ALE coverage would pay for your hotel bills up to the policy limit.
Expenses that are usually covered include:
- Hotel stays
- Temporary storage
- Food
- Dry cleaning
- Transportation costs
- Pet accommodation
If you’re forced to evacuate your home, you won’t have access to your normal amenities. As a result, you’ll be spending more than usual on things like food and fuel. ALE coverage pays the difference between what you normally spend and what you spend until your home is repaired.
Keep in mind that your loss of use coverage is limited—you won’t necessarily be able to stay at the Ritz-Carlton every night. Loss of use coverage is typically limited to 30% of your home’s dwelling coverage amount. So, if you have $250,000 in dwelling coverage, you’ll have about $75,000 in loss of use coverage.
If you want to find insurance that doesn’t break the bank, try using
Jerry
. A licensed broker, Jerry does all the hard work of finding quotes from the top name-brand companies and buying new home insurance. Jerry can even help you cancel your old policy upon request.View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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