Loss of use coverage is part of every standard homeowners insurance policy. While other portions of the policy help pay for repairing your home if it’s severely damaged, loss of use coverage is there for your everyday living expenses while the work is done.
Unfortunately, major home repairs can’t happen overnight, and simultaneously your expenses can increase dramatically. Loss of use coverage can help support you financially until you’re able to move back into your home.
To help you learn more about how home insurance works, here is a basic guide to what your loss of use coverage includes:
Loss of use coverage includes additional living expenses, or ALE, to help you maintain your normal standard of living while temporarily relocated. The details can vary from one provider to the next, but these are the major types of expenses you can claim from insurance:
Loss of use coverage also provides financial support for loss of rental income. If a room you normally rent out is damaged, fair rental value coverage can temporarily pay rent on behalf of your tenants. Therefore, you’re reimbursed for the payments you would otherwise lose.
One important thing to remember about the fair rental value coverage is that it only covers the rent payments and not the tenant’s personal property. This will be covered by the tenant’s own rental insurance policy.
Loss of use coverage is included automatically in most homeowners insurance policies. However, things like limits and exceptions can vary among providers. The more you understand about the details of your coverage, the more prepared you will be in case you ever need to file a claim.
Stephanie Englund Siegel is a successful Realtor with Compass. She was born and raised in the Northwest suburbs of Chicago. Living in the city for over almost 20 years has given Stephanie the in depth knowledge of many neighborhoods. Stephanie feels that Chicago's culturally diverse residents are what contribute to the richness and quality of life in its neighborhoods. Before joining the Compass Family, she worked as a paralegal for a real estate attorney which gave her the knowledge about every step in a transaction. From the very beginning of the process all the way to the end, Stephanie is dedicated to her clients and the success of the transaction so both parties get a win-win. Stephanie serves real estate needs in the following neighborhoods: Lincoln Park, Gold Coast, Streeterville, Loop, West Loop, South Loop, Lakeview, River north, Lincoln Square, Wrigleyville, Ravenswood, Greater Chicago area and surrounding suburbs.
