What Is Loss of Use Coverage?
Loss of use coverage is a part of renters insurance that helps cover certain additional living expenses if a covered disaster damages your home.
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Written bySarah Archambault
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Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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Edited bySara Getman
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Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.
Outside of work, Sara is an avid reader, and loves rock climbing, yoga, and crocheting.
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Loss of use protection comes standard with renters insurance. If your rental home isn’t suitable to live in due to a covered peril, loss of use protection helps pay for your living costs. It typically covers the difference between your normal expenses and additional charges you may have during a temporary living arrangement.[1]
Here’s a closer look at what loss of use insurance covers for renters.
What loss of use covers
Also known as additional living expenses (ALE) coverage, loss of use is one of three basic types of protection typically included with renters insurance. Personal possession and liability coverage also come standard. If you’re unable to live in your apartment after a covered disaster, like vandalism, fire, or windstorm, ALE helps cover costs while you live elsewhere.
These additional expenses include hotel stays, temporary rentals, restaurant meals, and other extra costs. After filing a claim, your policy reimburses you for the difference between your normal expenses and additional expenses. For example: If your monthly rent is $1,200 but your hotel bill is $1,500, your renters insurance may pay you the $300 difference.[2]
Good to Know
Coverage limits vary by insurer. With Progressive, for example, you may receive a flat fee between $3,000 and $5,000 or a percentage of your personal property coverage. So if your coverage limit is $100,000 and your ALE covers 30%, you may be eligible for up to $30,000 in loss of use protection. It’s important to understand the details of your policy.
What’s not covered under loss of use
Loss of use only covers additional living expenses when the rental home is unlivable and you need a temporary place to live. This means if your home is damaged by an earthquake or flood — two events not typically covered by renters insurance — you’ll need to cover additional living expenses out of pocket.
Expenses typically need to be for basic needs, like food and shelter. So you likely won’t be able to expense nonnecessities, like entertainment. Loss of use coverage also doesn’t pay for the cost of repairing or rebuilding your rental home. Those expenses are typically covered by the homeowner and their landlord insurance.
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How to file a loss of use claim
When your rental home is damaged and you need to find temporary accommodations, loss of use coverage helps pay for additional costs, like renting an Airbnb. But to get reimbursed for extra expenses, you’ll first need to file a claim. As with other renters insurance claims, you’ll likely need to provide documentation to your insurer.
This may include proof of damage from a covered peril, like pictures or paperwork that documents the reason you’re unable to live in your rental. To determine reimbursement, your insurer will need receipts for any additional living expenses, such as hotel bills and takeout. Your insurer may also ask you to provide paperwork that shows your normal living expenses, like a lease.
Keep in mind that your insurer may deny your claim if your rental home wasn’t damaged by a covered peril or you can’t live there for another reason. For example, if you’re temporarily relocated because your landlord decided to perform renovations, you may have to cover the cost of your extra expenses in full.
Do you need to pay a deductible on loss of use insurance?
When filing a loss of use insurance claim, you’ll typically need to pay your renters insurance deductible before coverage kicks in. So if your renters insurance deductible is $500 and the claim is for $3,000, you’d pay your insurer $500 and receive reimbursement for $2,500. Every insurer and policy is different, so be sure you understand that fine print.
Loss of use coverage limits
Coverage limits vary widely for loss of us. While some insurers may have a set amount, others may have coverage that’s equivalent to a certain percentage of your personal possessions limits. You may receive reimbursement in a lump sum, and there could be time limits on how long your additional expenses are covered.
When shopping for renters insurance policies, it’s important to compare coverage options. If a standard policy doesn’t offer enough protection, talk to your agent about adding higher coverage limits. Just keep in mind that your rates may go up if you opt for more protection.
Loss of use in renters insurance FAQs
Renters insurance is an affordable type of coverage that helps protect you financially when you’re a tenant — including covering additional expenses if you have to live elsewhere temporarily after a covered incident. Here’s some additional information about loss of use in renters insurance.
Is loss of use the same as rent loss coverage?
No. Loss of use coverage helps tenants pay for basic expenses when they can’t stay at their rental temporarily after a covered event damages the home. Rent loss coverage, on the other hand, protects landlords when their property is uninhabitable after a covered loss.[3]
What’s considered loss of use in renters insurance?
Loss of use in renters insurers occurs when a tenant can’t reside in their rental home after a covered peril while the property is being repaired or replaced. Under loss of use coverage, renters insurance helps tenants cover additional expenses incurred from temporary living situations like hotel stays, restaurant meals, or short-term rentals.
Is there tenant loss of use through landlord insurance?
No. Landlord insurance only protects the landlord from loss of rental income while a property is being repaired or rebuilt. Tenant loss of use is through renters insurance.
Can you use loss of use coverage if your apartment is being renovated?
No. You can’t use loss of use coverage if your apartment is undergoing renovations to upgrade the property. But if the repairs are due to a covered peril, like fire damage, you may be able to use your loss of coverage.
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Sarah Archambault
Sarah Archambault enjoys helping people figure out how to manage their finances and credit. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans. Her work has been featured on Credit Karma, Experian, LendingClub, Sound Dollar and USA Today Blueprint. She also writes for national insurers, banks and financial institutions like Aetna, MassMutual, Stripe, and UnitedHealthcare.
Sarah has been a contributor at Insurify since December 2022.
Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.
Outside of work, Sara is an avid reader, and loves rock climbing, yoga, and crocheting.