Do I Need Loss of Use Coverage?

How Does Loss of Use Coverage Work?

Most homeowners insurance companies include loss of use coverage in their policies. The limit is typically a percentage of your dwelling coverage—the amount it would cost to repair or rebuild your home.  For example, let’s say you have $250,000 in dwelling coverage, and your loss of use limit is 20%. If your home becomes uninhabitable after a covered event, you would have up to $50,000 in loss of use coverage to help pay for reasonable housing and living expenses (ale).   However, be aware that every policy is different, so check with your agent or policy to see how much protection you have.

What Does Loss of Use Coverage Not Cover?

It’s important to know that loss of use protection does not cover expenses that you were already responsible for before the loss occurred. This includes mortgage payments, rent, utility bills, etc. Also, if you have another place to stay—like a vacation home—you will not be reimbursed for any expenses related to that property. 

You may be responsible for a deductible for other parts of your claim.  For example, if water damage from a broken pipe makes your home uninhabitable and you have a $1,000 deductible on your policy, you would need to pay the first $1,000 of repair costs before your insurance company would start paying out on your claim.  Every insurance company handles deductibles differently, so make sure you know what yours is and how it applies before filing a claim.             

Everyone’s insurance needs are different. Loss of use coverage is typically based on your dwelling coverage and calculated at about 20% to 30% of the total value. Whether or not you need this protection depends on several factors, such as your assets, location, and personal preferences. Speaking with your insurance agent is the best way to determine what coverages are right for you and how much they should cost. 

If you still have questions about your coverage, our team is always here to help, even if you’re not already a client with The McBride Agency! Schedule with our team or import your current policies for a full review using the buttons below.


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