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Loss of Use Renter Coverage
What is Loss of Use Coverage on a Renter’s Insurance Policy?
Standard homeowners, condo, or renter’s policies usually include loss of use coverage, which can cover your living expenditures in a hotel or other lodging facility as well as your meal costs if an event covered by your home insurance prevents you from returning home. Loss of use coverage, also referred to as Coverage D, covers living expenses above your typical spending limit.
What does Loss of Use Cover?
In the event that a covered loss renders your Home unfit for habitation, loss of use coverage will reimburse you for your increased living costs. It’s crucial to remember that loss of use compensates for overspending on specific items. Let’s take the scenario where a fire damages your home. You’ve been eating at restaurants since you can’t cook in your own home. You usually spend $300 per week on groceries, but your weekly tab at the restaurant was $600. Your $300 discrepancy will be covered by your loss of use coverage.
Temporary home (hotel or rental home)
Additional fuel costs
Additional food expenses (groceries, restaurants, cooking supplies)
Storage units
Boarding of pets
Laundry
Moving costs
Limits on Loss of Use Coverage
On a homeowners policy: Policies for home insurance usually provide 10% or 20% of your dwelling coverage as loss of use coverage. For instance, if your dwelling coverage is $200,000, your coverage may increase to $20,000 or $40,000, depending on your policy, in the event of a covered loss.
On a condominium policy: The loss of use coverage offered by condo insurance plans is typically equivalent to 20% of the total limits for personal property and dwelling coverage. Your loss of use coverage limit will be $18,000, for instance, if your dwelling coverage has a $60,000 maximum and your personal property coverage has a $30,000 limit.
On a renters policy: Loss of use under renters insurance may be covered for a fixed amount (between $3,000 and $5,000) or as a percentage of your personal property coverage, depending on your insurance provider.
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