When trouble strikes, loss of use is here to help cover the cost while you pick up the pieces.
What is Loss of Use?
Your home is under repair after a fire overtook your home. According to the restoration people, it could be at least several weeks before you and your family can move back in. You’re scrambling to make arrangements amid chaos. This is where loss of use insurance comes in.
All homeowner insurance policies include what is called Loss of Use Coverage. It’s also known as additional living expenses (ALE) or Part D Coverage. When you’re forced to move out of your home or even a rental property due to a covered peril, loss of use will help foot the bill for costs incurred while making other arrangements.
You can take advantage of this coverage if your home is left uninhabitable due to events out of your control such as fire, water damage, storm damage, or explosions. While you’re unable to live in your home, it can help pay for hotel stays or even restaurant bills. Be sure to check with your insurance to see what loss of use coverage they offer.
What is covered under loss of use:
- Temporary residence (hotels, rentals, other temporary dwellings)
- Fuel expenses for an extended commute
- Moving and storage costs
- Restaurant and grocery costs
- Pet boarding fees
- Laundry expenses
- Parking fees (if applicable)
What are the limits of the coverage?
Although loss of use covers an extensive list of emergency expenses, there are certain limits. If your home was left uninhabitable by something outside of the covered perils, your loss of use claim won’t be taken. Floods and earthquakes are two examples of events that aren’t typically covered.
If your claim is accepted, there are limits to what you can use your funds for. Elective renovations or general maintenance aren’t covered under loss of use. Check-in with your insurance company to see what other exclusions they have as each insurance company has different coverages and policies.
How is Loss of Use Calculated?
Your loss of coverage is relative to how much dwelling coverage you have. Most insurance companies will provide coverage of 10%–20% of your insurance coverage.
So say you have a $200,000 policy. That means your loss of coverage benefits would range between $20,000—$40,000. In some cases, your insurance company will also take the value of your home into account when calculating your coverage.
How Do I File a Loss of Use Claim?
Typically, your loss of use claim is filed after you’ve made your expenses. It’s important to keep any and all receipts you think may classify as reasonable living expenses. Once you make a claim, your insurance company will need tangible proof of what you’d like reimbursed. If you’re strapped for cash and need funds sooner, some insurers will offer you a check upfront.
There are a few ways to go about filing a loss of use claim. You can contact your homeowner’s insurance agent directly, call your insurance company’s customer claims department, or you can visit the claims section of their website. In any case, they will usually instruct you to fill out a form detailing your “normal living expenses”. This will include money spent on your temporary living situation, food, gas, and any other applicable expenses. This is usually reported on a monthly basis.
Do I Have to Pay a Deductible?
In most cases, there is no deductible associated with filing a loss of use claim. You’re covered for the full cost of your reasonable living expenses and won’t need to worry about any out-of-pocket fees. But keep in mind that you might need to pay a deductible for other claims such as dwelling or personal property claims.
Helpful Tips When Filing for a Loss of Use Claim
- Continue paying your mortgage. Loss of use will not pay any missed bills.
- Be diligent in keeping records and receipts. As mentioned above, it is critical to bring forth solid documentation of all expenses you hope to get reimbursed for.
- Read up on qualified expenses. Every company and insurance plan is different. Do the work to determine what you can and can’t claim. A good rule of thumb is to count on coverage for “normal” expenses.
- Keep in mind how long your claim will take to process and when you should expect your reimbursement.
- Double-check on coverage before you book your hotel stay. You don’t want to encounter any reimbursement issues after you’ve already paid.
- Lean on your insurer and keep an open line of communication. Don’t be afraid to ask questions! Your insurance company has the capacity to answer your questions far better than any basic outline of this type of coverage.
Scheduling Your Home Repair
When you choose Restoration 1 Central Denver you can rest easy. We work with all insurance companies so scheduling your restoration is a breeze. Not only do we offer high quality, 24/7 services, but we’ll also help you every step of the way as you file a claim with your insurance.
From water damage to fire and smoke restoration, we’re primed to help your home restoration progress go as smoothly as possible. If you’re in Central Metro Denver or the surrounding area, give us a call at (720) 524-4680. We offer fast response times and free estimates!