Your loss-of-use coverage in your renters insurance policy will cover the cost of staying elsewhere if your dwelling becomes uninhabitable due to a covered peril
Your renters insurance will not pay for you to stay elsewhere if your home is damaged by a non-covered peril
Renters insurance does not usually cover natural disasters, but you can add flood or earthquake riders if you live in an at-risk area
Renters insurance is protection for your personal belongings if they get destroyed, damaged, or stolen, whether it’s in your home or not. Even if your suitcase gets stolen at the airport, your renters insurance can reimburse you for the contents. Renters insurance also covers your personal liability, so if someone gets hurt in your home, your policy will help pay for any resulting medical expenses or legal fees. Renters insurance is one of the most affordable insurance products, costing an average of $16 a month.
Damage to your property can happen in a variety of ways, but what happens if the damage is so great that you cannot stay in your apartment or house any longer? Contrary to common belief, unless it’s in your lease, your landlord won’t always pay or contribute for you to live elsewhere if your apartment, house or condo becomes uninhabitable.
If your dwelling becomes uninhabitable or unsafe due to a covered peril, like extreme water damage from a leak, your renters insurance will help you pay for a new place to stay.
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Renters insurance includes loss-of-use coverage, which is a component of renters insurance that will help pay for expenses if you can no longer stay in your rental. Some insurers call this relocation expenses coverage or additional living expenses coverage. Many renters insurance providers will reimburse you for expenses that accrue during the time your dwelling is uninhabitable – this could mean the cost of a hotel, motel, or even groceries if you’re staying with a friend or family member.
Renters insurance will only reimburse you or provide you with loss-of-use coverage if the incident is considered a covered peril. Most basic renters insurance consider the following to be covered perils:
For example, if a pipe bursts in your apartment, damages your furniture and fills your bedroom up with water your renters insurance will cover the damage to your belongings as well as a temporary stay at a hotel while your apartment dries out. e.
Remember, your loss-of-use coverage only steps in to cover your temporary living expenses after a covered peril, if the damage is not from a covered incident, any alternative living arrangements you make also won’t be covered by renters insurance. Check your policy if you’re not sure which perils are covered.
In order to get your temporary stay covered by renter’s insurance, you will first need to file a claim with provider and then pay your deductible in order for your additional living expenses coverage to start. Before you file a claim, you should have a few things on-hand:
You can file a claim by calling your insurance provider or filling out a claims form on their website. Once you file your claim, your renters insurance will assign you a claims adjuster who will determine if the damage to your home is considered a covered claim and help determine how much your payout will be.
Where your insurance provider will pay for you to stay depends on your policy and the amount of loss-of-use coverage you purchase. Most likely, it will be a nearby hotel, motel, or apartment. You can usually book where you stay or your provider will choose based on the amount of coverage you have.
If you decide to stay at a 5-star resort while you wait for your apartment to be fixed, your renters insurance policy won’t reimburse you for more than your policy’s limit, so your luxurious stay probably won’t be fully covered. Different providers have different ways of handling loss-of-use coverage, so before you purchase your renters insurance you should ask a representative what their loss-of-use coverage entails.
How long your renters insurance will cover your hotel stay depends on your insurance policy and on the damage to your rental unit. However, most insurance companies will reimburse you for the shortest amount of time possible that you are out of your home. That means as soon as your dwelling becomes habitable again, payments stop.
Your renters insurance loss-of-use coverage may also pay for extra expenses you accrue while you’re temporarily out of your home. For example, if you normally pay $50 a week in gas, but you’re staying further from your work and l gas is now costing you $75 a week, your renters insurance may reimburse you that extra $25 a week, depending on your policy.
Depending on your policy, your renters insurance may also pay for additional expenses like:
You should keep all of your receipts while you are temporarily displaced from your home so you have proof of how much your time away cost you. Your renters insurance will not reimburse you if you for luxury expenses, but will usually reimburse you for everyday needs.
There are a few reasons renters insurance will not allow you to use your loss-of-use coverage. The biggest reason your renters insurance would not cover your additional living expenses would be because the peril is not covered. There are some instances that you could consider to be inconvenient, but won’t make your home technically uninhabitable. Things like:
Even if the peril is covered by your policy, there are still certain circumstances when your provider will not provide you with loss-of-use coverage.
If you’re worried about certain perils exceeding your policy’s limit, you can add additional riders to your policy. Riders are add-ons to a policy that extends your coverage beyond the original terms of the policy. You can add additional riders to make sure you have protection in case of an event not already included in your coverage. You can also add more coverage for specific items that exceed your policy’s limit, like if you want to insure your wedding ring or valuable laptop.
Some additional riders you might want to consider when it comes to loss-of-use coverage are:
Kara McGinley is an Insurance Editor at Policygenius. She previously worked as a freelance writer and a copywriter for various startups. Her work can be found in Teen Vogue, The Culture Crush, Mask Magazine, and more.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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