Norton Seal Woman look at receipt for additional living expenses after covered loss.

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Homeowners Insurance and Temporary Housing

Consider this — your home or apartment is damaged from a small kitchen fire and, not only does your kitchen need repairs, but your home has smoke damage as well. Would you be able to continue comfortably living there while repairs are being made? Probably not.

That’s where insurance for temporary housing comes into play.

Temporary living expense coverage, also known as loss of use coverage or Coverage D, is reimbursement for living expenses when loss of or damage to your home by a covered event forces you to maintain temporary residence elsewhere.

You can use insurance for temporary accommodation in instances such as:

  • Your home becomes uninhabitable after a fire
  • A wind storm caused a tree to crush your roof
  • If a covered event, like a lightning strike, causes your air conditioner to break down
  • If an emergency, mandatory evacuation required you to relocate temporarily
  • A vehicle collided with your home
  • An explosion causes your home to become unlivable

Learn more about how this added coverage offers protection should your appliances, home systems or smart home devices be damaged due to mechanical, electrical or pressure systems breakdown.

So, if your home becomes uninhabitable due to a covered event, what exactly does temporary living expenses cover? Here’s what you need to know about insurance for temporary housing.

What Is Temporary Housing?

Depending on how long your home is uninhabitable, the cost of living expenses and temporary housing could add up. Insurance for temporary housing helps cover the cost for additional living expenses that accrue.

Temporary living expense coverage covers things like:

  • Temporary living arrangements, like a hotel or apartment
  • Increased food expenses, like restaurant meals while you’re in a hotel
  • Storage costs for household items
  • Transportation costs for increased mileage to home
  • Cost of utilities in new home/rental space
  • Moving costs
  • Parking fees
  • Laundry costs

Keep in mind, this coverage helps cover the increased expenses from temporary living costs compared to your normal standard of living.

So you’ll be covered for a rental property that’s similar to the cost of your existing home, or, for example, if you have to go to eat more often because you don’t have a functioning kitchen and your meal expenses are $100 more expensive than you usually spend, your coverage will reimburse you for that amount.

What Is Not Covered?

What’s covered by temporary living expense is different for each company, but American Family Insurance doesn’t cover direct or indirect loss or expense due to cancellation of any lease, mortgage, land contract or agreement.

What is or isn’t covered is on a case-by-case basis and your insurance company will guide you through the process and let you know what types of expenses are or are not covered by loss of use coverage.

Do I Have Insurance for Temporary Housing?

Most homeowners policies include insurance for temporary housing through the loss of use coverage/Coverage D on a policy. It covers you for the hazards listed on your policy, such as damage from fire, smoke, hail, wind, wildfire, vandalism, falling objects and more.

Often, your limit is based on a percentage of your dwelling insurance. So if your limit is 20% and your dwelling coverage limit is $200,000, your loss of use coverage would pay for up to $40,000 for additional living expenses if you had to temporarily relocate due to damage from an event listed on your policy.

Are You a Renter?

Your renters insurance policy includes loss of use coverage! It’s just one more reason why renters insurance is a good idea.

Connect With an Agent

Curious to learn more about temporary living expenses coverage? Your agent can help you better understand how you’re covered and ensure that you’re properly insured. Connect with your American Family Insurance agent today and gain peace of mind you’re protecting what matters most.

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Related Topics: Home Insurance