Question 9 in 100 Insurance Questions in 100 Days!
There is a portion of a New York Homeowners Insurance Policy that is often forgotten about. It is called Loss of Use or Additional Living Expense coverage. It’s the amount of money your insurance company will provide to you for expenses incurred due to living elsewhere after a claim.
If you were to have a fire loss, and the home were to be uninhabitable, you would still be responsible for property taxes, insurance, and of course, any loan payments on the property. Yes, the bank will expect to be paid as agreed even though you’re unable to live in the home in which they have lent the money for. That is why Loss of Use protection is so critical. It keeps you from having to move in with your in-laws, or pitch a tent on the front yard of a burned out house. Loss of Use provides expense coverage from having to rent or lease temporary housing, for costs associated to increased travel expense, and even food/dining expenses.
Sometimes a full repair and restoration can take months or even longer. Therefore pay close attention to the amount the insurance company has provided to you as coverage. You will find that information on the declarations page of your home policy. If you see a dollar amount listed, then that’s the limit. If you see 12-months, then you have a time-limit as opposed to a dollar limit.