Loss of Use in Homeowners' Insurance

They did their best, but you can't live in the house now.

They did their best, but you can't live in the house now.

Your home is your castle, but if it is severely damaged by a fire or other catastrophe, you may find the castle is no longer comfortable or inhabitable. Hopefully, your homeowners insurance policy has loss of use coverage. If so, you will be able to find some temporary living arrangements and have it paid for through the policy.

Typical Coverage

Most homeowners insurance policies include Loss of Use as part of the policy's standard coverage. Loss of Use coverage provides protection for you when your home is severely damaged to the point you cannot reside there. This applies whether your home is completely destroyed and must be rebuilt, or if it is damaged and needs repair. As long as you cannot live there, for example, there is no electrical power, running water or the roof is gone, the Loss of Use coverage kicks in.

What is Covered

Typical coverage includes reimbursement for hotel costs, apartment or home leases, restaurants and other living expenses you incur during the time you cannot reside in your house.


Some states have restrictions on what type of loss will be covered. For example, the California Department of Insurance reports on its website that the loss must be due to a fire. It is important to review your policy to determine what constitutes a loss of use in your state and purchase additional coverage for other catastrophes if needed.

How Much it Pays

A typical Loss of Use portion of an insurance policy sets the cap at 20 percent of the total policy value. For example, if you have $200,000 of dwelling coverage, the cap on your Loss of Use reimbursement will be $40,000. While this is a typical percentage, you should consult with your insurance agent about your individual policy to determine the amount of Loss of Use coverage you have.

About the Author

Candace Webb has been writing professionally since 1989. She has worked as a full-time journalist as well as contributed to metropolitan newspapers including the "Tennessean." She has also worked on staff as an associate editor at the "Nashville Parent" magazine. Webb holds a Bachelor of Arts in journalism with a minor in business from San Jose State University.

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