Loss of Use Claims
A fire or other catastrophe can force you to leave your home until the damage can be repaired. That is why it’s important to have loss of use (Coverage D) included in your home insurance policy.
If your home is damaged and deemed unfit for habitation, the loss of use insurance will allow you and your family to maintain your standard of living. It will provide reimbursement for hotel accommodations, apartment rental, restaurant bills, transportation and other living expenses while your home is being repaired. It can also cover the mortgage loan payments during the time you cannot live in your residence.
Most loss of use insurance provides coverage based on the cost of the residence. Coverage is generally 20 percent of the cost of the home. A home valued at $200,000, for instance, would typically have loss of use coverage of $40,000. There may be extra endorsements and premiums associated with loss of use insurance, which can be combined with similar coverage, such as property collapse, debris removal and reasonable repair.
It is important to read the loss of use provisions carefully prior to filing a claim. Issues can arise with reasonable living expenses. If a person rents a home that is much larger than their normal residence, for example, the insurance company would not consider that a reasonable expense claim. The loss also has to be related to events that are covered in the homeowner’s insurance policy. For example, floods are usually excluded in a standard homeowner insurance policy, so loss of use could not apply if your home was uninhabitable due to flooding.
NEC Claims can help you review your policies to be sure you understand the covered events and coverage amounts. Since loss of use insurance coverage only relates to the actual time you cannot live in the home, we will work with you throughout the entire process so you are not left with additional uncovered expenses. We can also oversee the repair process so you can get back in your home as quickly as possible.
Loss of Use Testimonial
Client: Scott, a Landlord
Type of claim: Loss of Use
Situation: Scott is the owner of a duplex in Kendall. A major plumbing issue caused significant damage to both units. During the claims process and throughout the reconstruction, his property was not in rentable condition. Scott was losing rental income every day that the property was not habitable.
Solution: East Coast was already handling the claim for the actual damage to the property. At the strategically right time in the process a Loss of Use claim was filed as well. As you may imagine, the insurance company offered absolutely nothing at first. East Coast was able to present all of the proper documentation and prove that Loss of Use coverage did exist under the policy.
The insurance company finally agreed to a settlement that East Coast offered and Scott collected a large percentage of his “lost” rent.