Our homes are supposed to be safe places—sanctuaries from the outside world. That’s why it’s devastating when a natural disaster, fire, accident, or any other tragedy forces someone from their home. And if this ever happens to you, the expenses could start to pile up. You may have to drive a long way to stay with family or live in a hotel for a while. Loss of use coverage can help ease the pain and stress you may experience by covering some or all of those unexpected costs.
What is loss of use coverage?
You might also hear it called “additional living expenses” or “ALE.” This kind of protection is usually incorporated into homeowners and renters insurance policies. As we said, it helps families and individuals pay for unexpected expenses when they have to vacate their homes—whether they rent or own. It can also help people who rent out property recover lost income from those rentals.
What expenses would loss of use coverage cover?
Obviously, you will probably need to find temporary lodging after vacating your house. But you might also have to face significantly more expenses than the cost of a last-minute hotel. This coverage can reimburse you for a wide variety of bills, including but not limited to:
- A temporary place to stay
- Utility bills in your temporary lodging
- Storage for your possessions
- Pet boarding
- Moving expenses
- Parking fees
- Transportation costs, including increased fuel expense
- Laundry costs
- Increased food costs
How much does this insurance cover?
Loss of use coverage usually has limits between 20% and 30% of your home’s value. For example, suppose your home is insured for $100,000. In that case, your insurance will probably reimburse you for $20,000 to $30,000 in expenses related to vacating your house. If your bills exceed those limits, then you may have to pay the rest on your own.
It’s always a good idea to know what’s in your policy, though. You could have unlimited coverage, or you may need to reach a deductible first before accessing loss of use protection.
What will I need to file a loss of use claim?
As with all insurance claims, you need to submit receipts when filing. Collect all of the documentation from your hotel stay, grocery trips, transportation, etc., and keep them in a safe location.
You will also probably need to estimate your everyday living expenses, such as the amount you typically for food, gas, utilities, and other needs before vacating your home. These numbers will help the insurance company make a fair comparison. It’s a good idea to start tracking your bills before anything happens to your home and keep receipts for those expenses. It always pays to be organized and prepared.
You most likely already have loss of use insurance built into your homeowners or renters policy. However, you should know what level of coverage you have and how to file a claim if a situation forces you from your home. Contact Morgan, Trevathan & Gunn Insurance, Inc. today to learn more about your coverage and adjust it if needed.