Coverage D – Loss of Use
Coverage D is one of the types of coverage contained in most standard storm damage insurance policies that consumers are rarely aware they have at their disposal.
If your policy contains Coverage D, the policy will reimburse you for what are known as “additional living expenses” you incur if you are unable to live in your home while it is being repaired or rebuilt.
What Types Of Expenses Does Coverage D Cover?
Loss of use coverage covers two distinct types of expenses. The first type of coverage is called Fair Rental Value. If you were renting a portion of your home and that portion of your home is damaged and unfit for living, your Coverage D will pay for the lost rent during the time your dwelling is being repaired or rebuilt. The second type of coverage is for additional living expenses which typically include the cost of a hotel or rental property, food, and any other necessary daily living expenses consistent with your normal standard of living. In some policies Coverage D may assist with mortgage payments on your damaged dwelling while its unlivable.
When Does Coverage D Apply?
In order for Coverage D to apply and for you to receive reimbursement, the damage to your home must have been caused by a peril (type of storm or disaster) covered by your policy and the damage to your home must make it unlivable.
Please note that if you are not sure if your house qualifies at “unlivable” you should check with your insurance company before incurring expenses. If after you have spent money the insurance company does not deem your home unfit for living, you may not receive reimbursement. If there is a dispute, you may need to obtain a document from legal authorities in your area stating that you are prohibited to live in your home due to safety or other concerns.
How Much of My Additional Living Expenses Does Coverage D Pay?
Coverage D is often limited in total payout amount and the length of time it will pay out. Loss of use coverage is typically limited to 20% of your dwelling coverage.
As with all information on this website, it is important that you read your policy or speak with you insurance broker to confirm that you have Coverage D, that it applies in your situation, and what and how much it covers. The last thing you want to do after storm damage has hit, is spend money you think you will be reimbursed for only to find out you’re not covered.