Loss Of Use Insurance

What Does Loss Of Use Insurance Mean?

Loss of use insurance is a type of policy that covers expenses incurred when the insured is unable to use their property temporarily due to damage that makes it uninhabitable or when an evacuation order is issued by lawful authorities, such as the police or disaster relief teams. While not all property insurance policies include this coverage, policyholders may have the option to add it for an additional premium.

Insuranceopedia Explains Loss Of Use Insurance

For example, if a fire damages significant portions of a home and renders it unsafe, loss of use insurance would cover expenses such as a hotel stay and additional costs like dining in restaurants. In the case of a car that requires extensive repairs, the policy would pay for a rental car.

However, loss of use insurance is typically limited to a “reasonable” amount of time. The insurance company assesses the damages and informs the insured of the duration for which the policy will provide coverage.