Loss of use coverage, also called additional living expenses, pays the extra costs of living somewhere else when a covered event such as a fire or burst pipe makes your rental unlivable. It’s the part of renters insurance that pays for a hotel.
What loss of use pays for
- A hotel, short-term rental or temporary apartment
- Extra food costs, such as restaurant meals above what you’d normally spend on groceries
- Extra transportation, like a longer commute from temporary housing
- Other reasonable increases in living costs, such as laundry or pet boarding
The key word is extra. If your rent is still due, or your landlord stops charging rent while the unit is being repaired, your insurer considers that when calculating what you’re owed.
When it applies
- Your rental is damaged by a covered peril and can’t be lived in, for example after a fire, smoke damage or a major pipe burst.
- A civil authority orders you out because of a covered peril nearby, such as a wildfire evacuation. Policies often limit this to a set period, commonly up to two weeks.
It doesn’t apply if the cause isn’t covered, such as a flood without flood insurance, or an eviction.
How much loss of use coverage do you get?
It’s often set as a percentage of your personal property limit, such as 20% or 30%, or as a fixed dollar amount. Check whether a month or two in temporary housing in your city would fit within that amount.
Tips if you’re displaced
- Call your insurer right away; they may approve or even book temporary housing.
- Keep every receipt.
- Track your normal monthly costs so you can show what’s “extra.”
Related: How to file a renters insurance claim.
More terms explained: the renters insurance glossary.
New to this? Start with What is renters insurance?
This site offers general information, not insurance or legal advice. Coverage, prices and rules vary by insurer, policy and state, so always read your own policy and ask your insurer or agent about your situation.