If you were forced to move out of your house or even a rental property, could you comfortably cover increased costs such as your hotel stay, rental or a temporary apartment, moving costs, pet boarding, storage unit costs for household items, excess of normal grocery or restaurant bills, and more? Keep in mind, in a total loss situation you could likely be residing elsewhere for over a year.
Loss of use coverage, also known as additional living expenses (ALE) insurance, can help pay for additional costs incurred as a result of a covered event that makes your home inhabitable while it’s being repaired or rebuilt. Simply put, this means you would be covered for expenses you wouldn’t ordinarily have if you were living in your own home. This coverage is typically built into your homeowner’s or renter’s insurance policy, but the amount of coverage you carry can vary significantly, and the coverage may be an amount that was never even explained to you.
Curious about how much loss of use coverage you carry? Take a look at your homeowners declarations page, under Coverage ID.
How much loss of use coverage do you need? Everyone’s insurance needs are different. Loss of use is typically based on your dwelling coverage and calculated at about 20% to 30% of the dwelling coverage limit. However, I strongly feel that my duty as an insurance agent is to guide you through this coverage rather than adhering to the limit automatically included with the policy. Many of the companies I represent allow the option to increase this limit above the amount automatically included within the policy.
Loss of use coverage is designed to cover a broad amount of costs: rent in an apartment or home where you and your family will reside in the interim until your home is inhabitable, meals, laundry services, boarding a pet, gas and mileage to meet with contractors and choose new materials and supplies for your home, duplication and mailing costs for documentation to replace your items with your insurance company, and so much more.
If you find yourself in the position to need to use this coverage, it will be the most important coverage you have ever purchased.
Alternate housing for the duration of your claim alone can exceed the limit of coverage that I have seen on many insurance policies. My introduction to the insurance industry was on the claims side: as a relocation housing specialist. During my time in that role I coordinated alternative housing and served as a liaison between the client and insurance adjusters representing many different insurance companies. Each day I worked closely with this amount of coverage and helped clients stay within the limits on the policy. Unfortunately, there are circumstances where you could exceed the limits of the policy coverage. Should that occur, you would need to pay for those expenses out of pocket.
Loss of use coverage is one aspect of insurance coverage that I stress the importance of with each client I work with. Home is a place to relax, and peace of mind is invaluable. If you aren’t sure how much you have, or should have, I welcome the opportunity to discuss your insurance needs and provide a proposal to start protecting your home, belongings, and peace of mind.
I can be reached at firstname.lastname@example.org or by calling 724-575-7237.