What is loss of use coverage in homeowners insurance?

Loss of use coverage in a homeowners policy can help pay for additional living expenses if a homeowner can’t live in their home due to a covered loss. Your policy will outline which losses are covered.

Is loss of use the same as additional living expenses?

Loss of use coverage and additional living expenses are often used interchangeably and are largely the same thing. Loss of use coverage has a slightly broader scope than ALE, as it can also cover lost rental income.[5]

How long does loss of use coverage last?

The length of coverage depends on your specific policy. Your coverage might have specific time limits or dollar limits.

Do you have to pay out of pocket first?

Whether you have to pay an out-of-pocket deductible before your loss of use coverage kicks in will depend on your specific insurance policy. Check with your insurer to confirm.

Does loss of use coverage apply to natural disasters?

Loss of use coverage may apply if your home becomes uninhabitable due to damage from a natural disaster that’s listed as a covered peril in your policy.

How do you file a loss of use claim?

To file a loss of use claim, reach out to your insurer to report the issue, such as damage from a fire or storm. Next, document the damage and save all your receipts for hotels, restaurants, or extra storage. Submit your claim online, using your insurer’s mobile app, in person, or over the phone.

Loss of Use Coverage: What It Is and How It Works

Updated May 28, 2026

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Loss of use insurance coverage, also called Coverage D, can help pay for your additional living expenses (ALE) if you can’t live in your home due to a covered loss. For example, if you’re evacuated due to a wildfire and have to live in a hotel for a few days, loss of use coverage will help cover your expenses.

Loss of use insurance typically helps cover the cost of your hotel, restaurant bills, and any transportation expenses that exceed your regular expenses.

Here’s what you need to know about what loss of use coverage is, how it works, and what it does and doesn’t cover.

Key Takeaways

Loss of use insurance covers the difference between your regular expenses and your temporary living expenses.
The amount of coverage you have depends on your specific homeowners insurance policy limits, which might include a time or dollar amount.
To use loss of use coverage, your home must be uninhabitable or unsafe to live in — inconvenience alone isn’t enough.

What Loss of Use Coverage Is

Loss of use coverage, also called “additional living expenses,” helps pay for additional living costs if you have to temporarily leave your home due to damage from a covered disaster, such as a fire or flooding.^[1]

This coverage is part of a standard homeowner insurance policy and covers hotel expenses, restaurants, and other costs that are beyond your regular day-to-day expenses while your home is being repaired or rebuilt. If you rent out part of your home, loss of use coverage may pay for the lost rent you would have earned.

If you’re forced to evacuate your home due to an emergency such as a wildfire, your ALE policy will typically cover your additional expenses.^[2] Evacuations due to an earthquake or flooding typically aren’t covered by loss of use, unless they’re specifically named in your policy.

How Loss of Use Coverage Works

Say you experience major damage to your kitchen due to a fire, which is covered under your policy. You can’t use the space or cook in your house, and the smell of smoke is really bad. It’s not safe to stay there until the kitchen is repaired, so you need to go to a hotel. This is when your loss of use coverage comes in handy.

Loss of use insurance will cover expenses that go beyond your normal living costs, such as the cost to stay at a hotel and eat in a restaurant, if there’s no kitchen in your hotel room. While you’re out of your home, keep detailed records and receipts, so you can submit them to your home insurance company for reimbursement.^[3]

Note that some policies have dollar limits, which are often a percentage of your dwelling coverage limits or time limit. Make sure you check with your insurance company to confirm the details of your loss of use coverage.

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Expenses loss of use coverage may pay for

If you can’t live in your home while repairs are made, loss of use coverage can help. While loss of use insurance won’t cover all of your day-to-day expenses, it will cover reasonable costs that are beyond your normal living expenses.

For example, if your normal weekly groceries cost $300 and you end up spending $400 to eat out, your insurance may reimburse you for the additional expense of $100.

Here are some examples of what your ALE insurance might cover:

Temporary housing (hotel, motel, apartment)
Increased food expenses
Added utilities
Laundry
Transportation
Parking fees
Storage or pet boarding
Lost rental income

You can speak with your insurer to confirm exactly what’s covered in your policy.

When Loss of Use Coverage Applies

Loss of use insurance only applies after you’ve experienced a covered loss, such as damage from a fire, storm, burst pipe, vandalism, or explosion. To activate loss of use coverage, your home must be uninhabitable or unsafe to live in — minor disruptions or inconvenience alone aren’t enough.

For example, if you no longer have heat in your home in the middle of winter, or you’re left without electricity or running water, loss of use coverage would apply. Similarly, if there’s damage to the structure of your home that makes it unsafe, your coverage would kick in.

But if the damage is largely cosmetic and doesn’t hinder your living there, loss of use wouldn’t cover your hotel stay.

Keep in mind that your policy only covers damage from disasters like earthquakes or flooding if it explicitly lists them as covered perils.

What Loss of Use Coverage Doesn’t Cover

Loss of use coverage doesn’t cover all of your expenses while you’re living away from your home. Coverage includes limits and exclusions. Some common, non-covered situations include:

Normal living expenses that you’d pay anyway, such as your phone bill^[2]
Rent or mortgage payments for your primary residence
Voluntary relocation
Fees associated with canceling your mortgage or lease

Loss of use insurance only covers damage from perils that are listed in your policy. For example, if your home floods but you don’t have flood coverage, your loss of use insurance won’t apply.

Limits and exclusions can vary between home insurers, so it’s a good idea to read through your policy or contact your home insurance agent.

How Much Loss of Use Coverage Do You Have

Loss of use coverage is typically a percentage of your dwelling coverage. Generally, a higher dwelling coverage limit means you’ll have more loss of use protection.

To understand how much loss of use coverage you may have, imagine your policy has a 20% limit, and you have $300,000 in dwelling coverage. This means you would have $60,000 in loss of use coverage.

Remember to always speak to your agent to understand the exact details of your home insurance coverage.

Some policies offer coverage options that can extend the time frame of your insurance or add an endorsement, such as flooding or earthquake coverage.

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Loss of Use Coverage for Renters and Condo Owners

A standard renters or condo insurance policy typically includes loss of use coverage. If a covered peril makes your living space uninhabitable, your insurance may pay for your additional expenses.^[4]

Depending on your insurer, loss of use coverage on a renters insurance policy might be a flat rate or a percentage of your personal property coverage. With condo insurance, it’s often a percentage of your combined dwelling and personal property coverage limits.

Loss of Use Coverage FAQs

If you still want more information about loss of use coverage, check out the following answers to some of the most common questions.

What is loss of use coverage in homeowners insurance?
Loss of use coverage in a homeowners policy can help pay for additional living expenses if a homeowner can’t live in their home due to a covered loss. Your policy will outline which losses are covered.
Is loss of use the same as additional living expenses?
Loss of use coverage and additional living expenses are often used interchangeably and are largely the same thing. Loss of use coverage has a slightly broader scope than ALE, as it can also cover lost rental income.^[5]
How long does loss of use coverage last?
The length of coverage depends on your specific policy. Your coverage might have specific time limits or dollar limits.
Do you have to pay out of pocket first?
Whether you have to pay an out-of-pocket deductible before your loss of use coverage kicks in will depend on your specific insurance policy. Check with your insurer to confirm.
Does loss of use coverage apply to natural disasters?
Loss of use coverage may apply if your home becomes uninhabitable due to damage from a natural disaster that’s listed as a covered peril in your policy.
How do you file a loss of use claim?
To file a loss of use claim, reach out to your insurer to report the issue, such as damage from a fire or storm. Next, document the damage and save all your receipts for hotels, restaurants, or extra storage. Submit your claim online, using your insurer’s mobile app, in person, or over the phone.

Sources

Insurance Information Institute. "What is covered by standard homeowners insurance?."
Oregon Division of Financial Regulation. "Additional living expenses (ALE) – frequently asked questions."
NAIC. "Consumer Insight."
Washington State Office of the Insurance Commissioner. "Learn how condo insurance works."
California Consumer Alert. "Insurance coverage for additional living expenses if the home is not habitable due to a wildfire."

Written byJessica MartelPersonal Finance Writer

Jessica MartelPersonal Finance Writer

Jessica is a freelance writer, professional researcher, and mother of two rambunctious little boys. She specializes in personal finance, women and money, and financial literacy. Jessica is fascinated by the psychology of money and what drives people to make important financial decisions. She holds a Masters of Science degree in Cognitive Research Psychology.

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