Loss of use coverage kicks in to cover living expenses when you’re no longer able to use an asset, such as your home or vehicle, usually due to repairs after a covered loss.

It covers costs such as a hotel or rental car. This type of coverage is built into most homeowners and renters insurance policies. It is typically an optional add-on for auto insurance policies

If you want to get the best loss of use coverage for the lowest possible rate, Insurify can help. You can compare personalized quotes for auto insurance, homeowners insurance, and renters insurance coverage in minutes. 

Score savings on car insurance with Insurify

Compare Quotes

Rather than collecting quotes from individual providers, which can be time-consuming and frustrating, you’ll be able to enter your information once and see side-by-side quotes from different insurers. This will help you get the lowest possible rate for the coverage you need. 

To give you an idea of how loss of use coverage works and what’s covered, let’s look at how it applies to auto, homeowners, and renters policies. 

Auto Insurance Loss of Use Coverage

If your car needed to stay at a body shop for repairs for several days, how would you handle your daily commute and other obligations?

If going without your vehicle would set you back financially or interfere with your ability to carry out your responsibilities, you might find that it’s well worth adding loss of use coverage to your policy. This will cover a rental car if you can’t use your vehicle. Typically, the covered loss will need to exceed your deductible for the loss of use coverage to apply. And most insurance companies require that you purchase comprehensive and collision coverage for the loss of use coverage to apply. 

While this type of coverage doesn’t come standard with most policies, it’s typically inexpensive to add. Often referred to as “rental reimbursement coverage” or “transportation expense coverage,” loss of use coverage for auto insurance typically costs about $35 to $60 per year. There’s not usually a deductible associated with rental reimbursement. 

Your insurance company will put daily dollar limits on how much you can spend on a rental car, and there’s typically a limit on the number of days that you’ll be covered. You’ll also be expected to choose a rental vehicle that’s comparable to your current car, so don’t expect to drive off into the sunset in a luxury convertible while your Honda Civic is in the shop. Loss of use insurance also doesn’t usually cover the cost of gas, additional insurance bought at the rental counter, or security deposits. 

Some auto insurance companies that offer loss of use insurance coverage include:

  • Safeco (includes valet rental car delivery service)
  • GEICO (if you choose Enterprise, GEICO will be billed directly)
  • State Farm (also pays for meals and lodging if your car is damaged more than 50 miles away from home)
  • Liberty Mutual (allows you to reserve your rental car from the Liberty Mutual app)
  • Allstate (also pays for alternate transportation like bus fare)
  • Esurance (coverage for up to 45 days or $3,000

Remember, having a good car insurance policy could make the difference between paying thousands in out-of-pocket costs and paying none at all. Compare quotes and find the best car insurance policy for the lowest price on Insurify today. 

Score savings on car insurance with Insurify

Compare Quotes

Homeowners Insurance Loss of Use Coverage 

Unlike auto insurance policies, homeowners policies typically come with built-in loss of use coverage. This coverage is also referred to as Coverage D or additional living expenses coverage. When the structure of your home is damaged, dwelling coverage covers the cost of repairs from a covered peril. From there, you can file a loss of use claim with your insurance provider to be reimbursed for living costs when you need to stay away from your home. 

Homeowners loss of use insurance typically covers necessary expenses like temporary housing, including a rental home or hotel bills, restaurant bills, parking fees, pet boarding, and other normal living expenses up to your loss of use coverage limit for a period of time.

Let Insurify help you discover the cheapest and best homeowners insurance policy for you and your family. Our comparison tools make homeowners insurance shopping (and saving) simple, easy, and fast. 

Compare Home Insurance Quotes in Two Minutes

See Quotes

Renters Insurance Loss of Use Coverage

As with home insurance policies, most renters insurance policies include loss of use coverage that kicks in after property damage makes your rental property uninhabitable. Policyholders can use this coverage to pay for a temporary apartment or other lodging costs. For many renters policies, loss of use insurance can also cover groceries, fuel, and certain fees associated with finding a new rental. Check with your insurance agent to see what’s included in your policy. 

You’ll be expected to find temporary housing similar in fair rental value to your current rental, so you won’t be able to snag free nights at a luxury resort if your apartment becomes uninhabitable. There are also limits to what will be covered. Typically, renters’ loss of use coverage only lasts for as long as it takes to find new housing or repair the damage to your property and is capped at a specific number of months.

Make sure you check out Insurify for the most affordable renters insurance policies!

The Bottom Line on Loss of Use Insurance

Loss of use coverage usually comes standard with homeowners and renters policies, so you’ll be reimbursed for living expenses in the case of a covered loss. But you may want to check with your insurance agent to find out your coverage limits and your options for increasing those limits. You’ll need to opt in and pay for rental car reimbursement coverage, but it’s usually inexpensive enough to be worth the cost. 

To ensure you get the lowest rates on all your policies, use Insurify to compare personalized insurance quotes across providers. 

It’s the best way to compare policies apples-to-apples, so you can get the coverage you need while staying within your budget. Insurify’s comparison tool will also factor in any discounts you may be eligible for. You’ll just need to enter some information about your vehicle and driving history to get started. 

Updated September 11, 2020

Lindsay Frankel is a Denver-based personal finance writer for Insurify. Her work has been featured in publications such as LendingTree and FinanceBuzz. When she's not writing, you can find her enjoying the great outdoors with her rescue pup, playing music, or listening to audiobooks.