Loss of Use Insurance


Definition - What does Loss of Use Insurance mean?

Loss of use insurance is a type of policy that covers expenses incurred when the insured cannot temporarily use their property due to damages that render it uninhabitable or an order to evacuate from lawful authorities, such as police or disaster relief teams. Not all property insurance policies include this coverage, but policyholders might be able to add it for an extra premium.

Insuranceopedia explains Loss of Use Insurance

For example, if a fire burns down significant portions of a home and render it unsafe, the loss of use insurance would pay for a hotel and additional expenses such as having to eat in restaurants. In the case of a car that requires extensive repairs, it would pay for a rental car.

However, loss of use insurance is limited to a "reasonable" amount of time. The insurance company investigates the damages and informs the insured how long the policy covers them.

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