Is It Beneficial for Me to Secure Loss of Use Coverage?

Loss of use coverage is a standard feature in all homeowners insurance policies. Although many people think of house insurance as their source of security to rebuild their homes when needed or cover medical payments in the event of an injury, some homeowners fail to think of where they would live in the event that their dwellings are uninhabitable. Although this coverage comes with every insurance policy, you can opt for extra coverage if you need a larger policy based on your circumstances. This feature can also benefit you if you currently rent out your home.

Loss of Use Basics

Your house insurance is there for you if your home becomes a total loss. This can happen during a fire, a severe storm or hurricane. If an earthquake or flood totals your home, then you will have needed insurance riders in order to cover the losses. One benefit to homeowners insurance that many people overlook is its ability to help cover your basic living expenses while you are waiting for your home to be rebuilt.

The amount of time it will take to rebuild your house depends on a number of factors. First, the insurance company will have to review all of the specifics and cut you a check for your claim. Once you have the funds, then the contractors will work with you to start rebuilding. The size of your property is also another large factor in determining its completion date.

No matter how long it will take to rebuild your house, you will need to find other temporary living arrangements. This might be a hotel if the rebuilding process is not expected to take more than a few weeks. On the other hand, you might have to find another comparable home to rent for your family if the building process is expected to take a long time. Loss of use coverage also covers laundry and meal expenses.

The amount of money you get through your loss of use coverage also depends on the overall amount of coverage you have associated with your house insurance policy. Each policy is different, and the way in which providers handle loss of use coverage can vary. It is important to obtain all of the specific information in advance so you don't scramble in the event of an emergency.

Renting Your Home

Some homeowners have the misconception that paying for loss of use coverage is not beneficial if they rent their homes out. Although you would not be eligible for reimbursements related to your personal costs since you do not live there, you may be able to make a claim for loss of funds. If your home is totaled, then the tenant will have to make arrangements elsewhere until your house is rebuilt. During this time, you cannot reasonably expect the tenant to pay you rent.

To make up for lost rent, you can add fair rental value coverage to your policy. If you ever have to make this kind of claim, you can be eligible for being reimbursed the equivalent of your regular rent. This option is not available on every policy because not all homeowners rent their properties.

Also note that you are not responsible for a tenant's personal belongings if they get damaged in the event of a fire or severe storm. It is up to the occupant to secure their own renters insurance policy in order to cover their belongings. Loss of use coverage does not apply to the loss of any personal items within the home. If you live in the house, then the personal property coverage component of your homeowners insurance will cover your losses.

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