Your home insurance covers a lot of different things – and it does a lot of cool tricks. It protects the structure of your home. It covers your personal belongings. It even covers your liability if a guest gets hurt. But will it cover your hotel bill if you face a loss that requires you to leave your home and stay somewhere else? There’s this other section that your policy should have that’s called additional living expenses (or loss of use coverage), and it can cover a hotel stay. What is additional expenses coverage? We’ll explain.
What is additional living expenses coverage?
Okay. So, we mentioned before that your home insurance protects your home and your belongings. But it will also help you if you have a huge loss to your home and you can’t stay there. Relocating and staying elsewhere (for example a hotel) is expensive. Additional living expenses coverage can reimburse you for the expenses you accrue because you can’t stay in your home.
Let’s say that your home has a fire. Most importantly, you and your family are fine, but the house is severely damaged. It’s clear that, unfortunately, you’re going to need to stay somewhere else while the home is being rebuilt. That means that you’re looking at staying at a hotel for a while. You’ll have to eat out at restaurants quite a bit. You might have extra transportation costs to get to work. Maybe you’ll even have to board your dog if you can’t bring him to the hotel with you.
Those expenses can add up very quickly. That’s why your home insurance accounts for this kind of thing.
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Basically, loss of use coverage will help you maintain your current lifestyle and cover any additional expenses that are in excess of your normal spending if you have to move out of your home due to a covered loss. (It’s not going to pay for a super fancy hotel or apartment if that’s not what you normally live in.)
Expenses that could be covered are:
- Hotel bills/Accomodations
- Food costs – groceries and restaurant bills
- Transportation costs
- Pet boarding
- Laundry expenses if you don’t have access to a washer/dryer in your temporary accomodations
When does additional living expenses coverage apply?
Loss of use coverage can be used when your home is hit by a covered loss such as a fire or a tree falling through it. It won’t reimburse you for extra expenses that arise due to a loss that is not covered, such as flooding. (Remember, flooding is not covered by home insurance.) Also, the home has to be uninhabitable for the coverage to apply.
Coverage can depend on the claim itself, so be sure to ask if your situation will qualify you to receive additional living expenses coverage.
When you’re filing your additional living expenses claim.
Just like taking a home inventory can be a good step to take to be prepared for filing a future claim, having a list of your normal living expenses can really help you when you’re filing your claim. That way you can easily give the insurance company an idea of your normal expenses.
You also need to hold onto any receipts you get from these additional expenses. That’s because your home insurance company will reimburse you for these extra expenses that you accrue after the fact rather than paying for them right at that moment. The insurance company will evaluate how these expenses compare to the expenses you normally have to maintain your lifestyle.
How much additional living expenses coverage do I have?
You’ll have to read your policy carefully to see what limit has been placed on your loss of use coverage. Most likely the limit will be a certain percentage of the dwelling coverage you have on your house. Be sure to check your policy to see how much coverage you have and read it carefully to make sure that you’re spending money on things that will be reimbursed.
So, that’s what additional living expenses coverage (a.k.a. loss of use) coverage is. Make sure to read your policy carefully to see if this coverage is included, and, if so, the terms and limits of the coverage. Your home insurance does lots of cool things, and loss of use coverage is one of them.
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