- Loss of use coverage helps pay extra living costs if you can’t stay in your home after a covered loss.
- It may cover temporary housing, higher meal costs and, in some cases, lost rental income.
- It usually doesn’t pay regular bills or damage from non-covered events.
- Coverage limits vary by policy, so it’s smart to review your amount before you need it.
What Is Loss of Use Coverage?
Loss of use coverage, sometimes called Coverage D, is an important part of many property insurance policies. If your home becomes uninhabitable after a covered loss, this coverage can help pay for the extra costs of living somewhere else while repairs are being made. It also helps with temporary living expenses above your normal budget after a covered claim. In many cases, this protection is included in homeowners insurance, and similar coverage may also be available through condo and renters policies.
Key Takeaways
Quick takeaway: Loss of use coverage is generally designed to help with the extra cost of living away from home after a covered loss — not to pay every household bill you normally have.
What does loss of use coverage include?
Temporary housing costs
Coverage D can help pay for temporary housing costs when you’re displaced due to a covered loss. This may include hotel stays or short-term rentals until your home is repaired or you can return. In addition to homeowners policies, similar protection is often available with condo insurance and renters insurance too.
Increased living expenses
When you can’t stay in your home, everyday costs often rise. Loss of use coverage is generally meant to help cover the difference between your usual living expenses and the added costs of being displaced. Depending on the claim, that may include:
- Transportation if your temporary housing is farther from work or school
- Pet boarding fees while your home is repaired
- Laundry services if you can’t use your washer and dryer
- Food expenses that go beyond your normal budget
Examples of expenses loss of use coverage may help with:
| Expense type | May be covered under loss of use coverage | Why |
|---|---|---|
| Hotel or short-term rental | Often yes | It may be needed if your home is temporarily unlivable after a covered loss |
| Higher meal costs | Often yes, in part | Coverage may help with the extra amount above what you normally spend |
| Normal mortgage or regular rent payments | Usually no | This is generally a regular household expense, not an added living cost |
| Extra commuting or laundry costs | Sometimes | These may qualify if they increase because you can’t live at home |
Fair rental value (loss of rental income)
If you rent out part of your home and a covered loss forces your tenants to move out, loss of use coverage may also include fair rental value protection. This can help replace lost rental income while the damaged area is being repaired. For homeowners who rely on that income, this part of loss of use coverage can be especially important.
What is not covered under loss of use coverage?
Loss of use coverage can be valuable, but it doesn’t apply to every situation. A few common limitations to keep in mind include:
Non-covered perils: If the damage that makes your home unlivable isn’t caused by a covered event, this coverage typically won’t apply. For example, home renovations usually wouldn’t be covered.
Normal living expenses: Coverage is generally for additional living expenses, not your regular bills. If your grocery costs are usually $250 per week and they increase to $350 while you’re displaced, the policy may reimburse the $100 difference rather than the full amount.
Evacuations not ordered by civil authority: If you choose to leave your home when no civil authority has ordered an evacuation, expenses are typically not covered. Coverage usually applies only when evacuation is mandated due to a nearby covered peril.
Good to remember: If you need to use loss of use coverage, keep receipts for lodging, meals, laundry, transportation and other added costs. Documentation can help support reimbursement for eligible expenses.
How loss of use coverage limits work
Loss of use coverage limits vary by policy type and help determine how much your insurer may reimburse for added living expenses after a covered loss. The details can differ, but the coverage is often tied to other parts of the policy.
Homeowners insurance: Loss of use insurance often provides a percentage of your dwelling coverage limit for additional living expenses.
Condo insurance: Condo policies may base this coverage on a percentage of your building items and personal property coverage.
Renters insurance: Loss of use renters insurance may be offered as a flat dollar amount or as a percentage of your personal property limit, depending on the policy.
If you live in an area where temporary housing is expensive, it may be worth reviewing whether your current limit feels realistic for your household.
Does loss of use coverage work the same for every policy? Not exactly. Here's how it may differ for homeowners, condo owners and renters:
| Policy type | How loss of use coverage may be structured | What it’s generally meant to help with |
|---|---|---|
| Homeowners | Often a percentage of dwelling coverage | Temporary housing and added living expenses after a covered loss |
| Condo | May be based on building items and personal property coverage | Temporary housing and added living expenses after a covered loss |
| Renters | Often a flat amount or percentage of personal property coverage | Temporary housing and added living expenses after a covered loss |
Additional details to know:
Time limits may apply: Coverage may extend for a set period, such as 12 or 24 months from the date of loss, depending on the policy.
No additional deductible applies to loss of use coverage: The policy deductible would generally apply to the claim as a whole, rather than as a separate deductible just for Coverage D.
Documentation is important: Keep records and receipts for hotels, meals and other added costs to support eligible reimbursement.
Understanding these limits can help you plan ahead and reduce surprises if you ever need to rely on this coverage.
Loss of use coverage for renters and loss of use coverage for homeowners
While loss of use coverage for homeowners and renters is very similar, it is helpful to understand the basic difference. The purpose is the same in each case: help with extra living costs if you can’t stay in your home after a covered loss. The difference is the policy structure behind it.
The available limit for loss of use coverage for a home is based off the amount that the dwelling is insured for. For renters, the limit is based on the amount of coverage carried on the personal property policy.
When should you review your policy? It’s a good idea to review your policy before you need to file a claim. Ask whether your current coverage limits still fit your home, your area’s rental costs and your household needs. That may be especially helpful if housing costs have increased, you rent out part of your home or you’ve recently changed living arrangements.
Get the right home insurance coverage for your needs
Loss of use coverage works alongside other important protections that together create an insurance package. To better protect your home and everything in it, it helps to understand how this coverage connects with the rest of your policy:
Dwelling coverage: Helps protect the physical structure of your home against a loss covered by your policy.
Other structures coverage: Helps cover structures that aren’t attached to your home, like a detached garage, shed or fence, against covered damage in your policy.
Personal property coverage: Helps protect belongings like furniture, electronics and clothing, if they’re damaged in a covered loss.
Personal liability coverage: Provides protection for injury claims, lawsuits or damage to others’ property for which you are liable.
Medical payments to others coverage: Helps provide coverage for injuries to others if they’re accidentally hurt on your property, regardless of fault.
Regular policy reviews can help keep your coverage aligned with your lifestyle. Renovations, changes in household size, rising rental costs or new uses for your property may affect whether your loss of use coverage still feels adequate. You may also want to explore other home insurance coverages for a broader look at your options.
Get a home insurance quote today
FAQs about loss of use coverage
Loss of use coverage helps pay for extra living expenses if your home becomes uninhabitable after a covered loss. It may help with costs like temporary housing, meals and other necessary added expenses above your usual budget.
In terms of coverage, loss of use insurance works the same way for both homeowners and renters, though available coverage limits and structure can differ.
Usually it helps with the extra amount you spend because you can’t stay at home, not necessarily the full cost of your regular living expenses. For example, it may help pay the difference between your normal grocery budget and higher meal costs while you’re displaced from a covered loss.
Keep receipts, invoices and any records for hotel stays, rent, meals, transportation, laundry, pet boarding and other added expenses related to your displacement.
Your Policy, Policy Declarations or Amended Declarations in effect on the date of loss is the primary source of reference for your coverage, coverage limits and deductible amounts.
This inclusion of non-Amica companies, products, services or statement herein (“Third-Party Content”) is for general informational purposes only and does not constitute a recommendation or endorsement by Amica Insurance. Policies, views, opinions or positions of Third-Party Content expressed herein are those of the authors and do not necessarily reflect the policies, views, opinions or positions of Amica Insurance. Amica Insurance makes no warranties, expressed or implied, as to the accuracy and reliability of Third-Party Content.
This content may contain helpful tips, explanation and advice. Your use of this information is voluntary and may not be effective in every circumstance. Amica encourages you to use good judgment and put safety first.
For more information on our editorial process and content standards, take a look at our editorial guidelines.
AMIC-02-061027