A seriously underrated coverage on your homeowners, condominium and renters insurance policy is Loss of Use.  I particularly like this one because the worst part of a claim is how it affects your normal everyday living.  If I have to go out of my way to do something that would normally be easy, I get annoyed.  Same with the cost of having to do something that I wouldn’t normally have to if I didn’t have the claim. 

 So, let’s break down this coverage known as Coverage D – Loss of Use.  It is a certain percentage of your Dwelling coverage or for renters and condos, a certain percentage of your personal property coverage.  Of course Loss of Use can always be increased.

Loss of Use covers basically three things:  Additional Living Expense, Loss of Rental Income, and Civil Authority.  The first coverage, Additional Living Expense, is when your “residence premises”, as defined on your policy, is unfit to live in the policy will pay for any unnecessary increase of living expenses incurred by you so that your household can maintain its normal standard of living.  Payment will be for the shortest time required to replace or repair the damage, for you to settle elsewhere if you have to permanently relocate, or up to the covered limit.

 The second coverage, Loss of Rental Income, is applicable when the part of your “residence premises” that you normally rent out to tenants is unfit to live in from a covered loss.  It will reimburse the insured for fair rental value until the repair or replacement has been made or up to the covered limit on the policy.

 And lastly, Civil Authority is when a civil authority (the town for example) prohibits you from living at the residence premises due to neighboring damage (next door neighbor, house across the street etc.).  Under this coverage the policy will pay both additional living expense and loss of rental.

To give you a quick example of Loss of Use, this past month a client’s house had a fire on one half of the house or two of the apartments.  There are four apartments total and none of the tenants had renters insurance.  All four tenants had to live elsewhere because the house was uninhabitable due to water damage from the fire department and electrical problems.  If any of those tenants had had renters insurance, their policy would have paid for them to stay somewhere else until the apartment was deemed ok to live in by the insurance company.   

We hope you see why we love this coverage and the value it adds to your homeowner, renter or condo insurance policy!