Answer If something like a fire or a leak from the unit upstairs forces you to move temporarily into another living space — a hotel, another apartment, an Airbnb — renters insurance may help cover additional costs. But there are limits: the reason you’ve had to move must be a peril covered by your policy. And you’re likely only covered for costs above what you’d be spending at home.
This is called loss of use coverage or additional living expenses coverage. Here’s how it works:
Usually, it covers the time your rental unit is undergoing repairs, and it can last as long as a year or two.
Your temporary housing needs to be comparable to your rental unit. If you live in a studio, it won’t cover the rent for a four-bedroom house or a hotel suite.
It covers only extra costs. If you pay $1,000 a month for your rental unit but your hotel room costs $1,500, you could file a claim for the difference, or $500 a month.
Loss of use coverage can also help with other added costs that result from your move, things like eating out or food delivery if you can’t use your kitchen, laundry, parking and boarding for your pet. These must be extra costs. For example, if parking was free at your rental unit but you must pay to park in your temporary rental, the cost could be covered.
Typically, loss of use coverage comes with a limit, either in dollars or as a percentage of your personal property coverage limit.
The most complicated thing about loss of use coverage is figuring out when it applies. That depends on the perils — unexpected, sudden events — that are covered by your renters insurance policy.
Earthquakes and water damage from flooding aren’t covered without separate insurance. But water damage caused by a plumbing problem in your building might be. If you have to move because of a power outage or because the water is out, coverage depends on the cause. A widespread grid meltdown, for example, typically won’t be covered, but an extended blackout that happens because of an electrical problem in your building might be.
Your policy can tell you which perils are covered by your policy and what your loss of use limits are. You’ll need receipts if you file a claim.
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