How Does Renters Insurance Loss Of Use Work? Img ©
Renters insurance loss of use is also known as additional living expenses. It’s designed to make sure that a covered loss doesn’t cause you to incur additional costs that you shouldn’t have to bear. If you have to continue paying rent after a loss, for example, should you also have to bear the cost of somewhere else to stay? Of course not! Note that as we clarify the coverage and how it works, we’ll be quoting from a policy form used by Travelers.
If a loss by a peril insured against under this policy to covered property or the building containing the property makes the residence premises not fit to live in…
The perils insured against under the policy are the list of things that you’re covered against. A few common examples would be fire, lightning, windstorm, hail, and theft. The key is that the loss in question must be a covered loss in order for the loss of use coverage to be triggered.
If you have open perils coverage, of course, that list is much longer because open perils covers any losses that aren’t specifically excluded, such as nuclear hazard.
The loss must occur to the building you live in which contains the covered property, or to the covered property itself, and it must make the residence premises unsuitable for you to live in. If your laptop is stolen from your car, that theft loss would likely be covered, but it would not impact the suitability of the residence premises for you to live in.
On the other hand, if a pipe breaks and you have water damage throughout the apartment, that’s probably a situation where the apartment isn’t fit to live in and the loss of use coverage could apply.
We cover any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living.
What is your normal standard of living? It’s the way you normally live. You’ll need alternate accommodations, of course, but you’ll also incur expenses to feed and clothe your family for example. Those expenses add up quickly, especially when there’s a significant loss.
When you have kids, there are even more expenses – not just because there are more people, but you’ve also got to get them to school, make sure they have the things they need to do well, and work all of that in around your own work schedule. These costs are often considered to be hidden costs, because they’re not the direct cost of replacing personal property after a loss, but hidden does not mean insubstantial.
Additional living expense due to fungi, other microbes, or rot remediation will not be paid in addition to any amounts paid or payable under Additional Coverage 16. Limited Fingi…
Renters insurance mold coverage is an entirely separate matter. The coverage is excluded from the policy as a whole, and then carved back with an endorsement. The amount of that carved back coverage will vary by state, location, and other factors. The general idea is that mold and fungi should not rise to the point where there’s a serious problem because the root cause should be fixed as soon as it’s noticed, which mitigates the damage.
Payment will be for the shortest time required to repair or replace the damage or, if you permanently relocate, the shortest time required for your household to settle elsewhere.
Additional living expense coverage does not have a specific time limit on it in the policy form we’re examining here, because it takes a variable amount of time to recover from a loss. If you’re in a tight housing market, it may well take longer to relocate especially if your landlord doesn’t have availability of a similar unit to move you into.
The idea is that you will use the coverage for the shortest possible time needed to either fix the problems caused by the loss or to find somewhere else to live. Reason, of course, is applied to this. If you have kids in school, it’s reasonable that you’d want to remain in the same district and the correct area for the school they attend. If this adds a few days, it’s not unreasonable.
Renters insurance loss of use coverage can be a real lifesaver when you suffer a significant loss. The organizations that are able to help after a fire loss, for example, might only be able to give you three days in a hotel. That’s probably not sufficient time to recover from the loss or to find somewhere else to live, especially in a housing market like Tucson.
Your renters insurance policy contains many types of coverage that you’re probably not aware of. Loss of use is one of the most important ones that is often forgotten about, but there are many others as well. The best way to find out what’s in your policy is to read it, and then to ask questions about what you’ve just read of an insurance expert for renters.
Effective Coverage is happy to answer those questions, and all of our staff is salaried so that they’re able to take all the time you need to answer those questions to your satisfaction. Just like any other major life decision, when dealing with the insurance that protects your family it’s important to work with experts who can both get you the right coverage for your needs and who can explain what the coverage does and why it’s important to you and yours.
Whether you want to understand every detail, or you want to be in compliance with your lease as quickly as possible and just get cheap renters insurance to cover what’s mandated, we have a solution for you. Just call (800)892-4308 or click to get covered - whether you need Arizona renters insurance quotes online or coverage anywhere else!
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Photo Credit: Joshua Kruger 121107-A-RE111-115 CC BY SA 2.0