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What is loss of use coverage?

A man leans against the side of his wrecked car while speaking on the phone with a SelectQuote agent about loss of use

Loss of use coverage, also known as additional living expenses coverage or Coverage D, is a type of home and auto insurance coverage that will pay for your lodging, meals, animal boarding and other expenses in the event you are unable to stay in your home due to natural disaster or other unpredictable events over which you have no control. Here you can learn more about the importance of loss of use coverage.

How do you prove loss of use?

When you file a loss of use claim, your insurance company will make a determination on whether the additional living expenses you submitted surpass your normal living expenses. While loss of use claim determinations vary from state to state for auto insurance, loss of use claims are typically determined by a three-part formula that calculates the number of days the vehicle was out of service multiplied by the daily rental car rate. 

  1. One day is equal to four hours of labor – this represents the average number of hours that a vehicle is worked on per day. 
  2. Two weekend days are added for every five repair days – assuming every repair begins on a Monday
  3. Three administrative days are allowed to obtain an estimate, take the vehicle to the shop and retrieve the vehicle. 

If the vehicle requires over 30 days to repair, the insured will usually be responsible for transportation costs beyond the 30 days.

Tips for Filing for a Loss of Use Claim

While the process can be different between each carrier, here are some tips for filing a loss of use claim:

Homeowners Claim

  • You’ll have to detail your “normal living expenses” in which you’ll document how much you typically pay for gas, food, rent and other applicable expenses each month. This is something you can do before a loss occurs. 
  • Keep all receipts that stem from additional living expenses.

Auto Claim

  • You’ll want to contact your auto insurance carrier as soon as the accident occurs, and tell them that you’ll need to file for a loss of use claim. 
  • Review your policy’s loss of use coverage to understand how much you can claim per day and what type of vehicle you are allowed to rent.
  • Take pictures of your damaged vehicle and get quotes from auto repair shops to determine how long your vehicle will have to be in the shop. 
  • Put all of the details and proof in writing so your claim can be processed quickly. 

What is loss of use coverage limited to?

The loss of use coverage under your homeowners insurance policy is meant to provide coverage for additional living expenses that have resulted from a covered loss. Loss of use coverage won’t cover expenses you were already responsible for before the loss. 

Typically covered under loss of use coverage:

  • Cost of temporary residence, such as a motel or hotel
  • Pet boarding
  • Additional food expenses

Typically isn’t covered under loss of use coverage:

  • Your mortgage
  • Child care expenses
  • Insurance

How much loss of use coverage do you need?

The amount of loss of use coverage needed is typically calculated on a percentage of your dwelling coverage or your home’s insured value. Oftentimes, 20 to 30 percent of your dwelling coverage is a sufficient amount of loss of use coverage. 

Find a Loss of Use Auto & Home Insurance Plan with SelectQuote

Damage to your home or vehicle can bring on a lot of stress both physically and financially. Having sufficient auto and home insurance coverage can lessen the impact of any financial stressors, as well as provide peace of mind when you need it most. At SelectQuote, we can help find you the right amount of coverage at a price that works for you in just minutes.

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