What Is Loss of Use Coverage in Rhode Island Home Insurance?
Have you ever wondered who pays for your hotel bills if a storm or fire makes your home unlivable?
That’s exactly where loss of use coverage steps in. It’s one of those sections of your policy you hope to never use — but you definitely want it there when you do.
What “Loss of Use” Actually Means
Loss of use coverage — sometimes called additional living expenses (ALE) — is part of your home insurance policy that helps pay for the extra costs of living away from home if your house becomes uninhabitable due to a covered peril.
Instead of leaving you scrambling for cash while your kitchen gets rebuilt, it helps cover things like:
Hotel stays or temporary rental costs
Restaurant meals or increased grocery bills
Laundry and storage fees
Extra fuel or transportation costs
Pet boarding or daycare if needed
Importantly, loss of use only pays the extra expenses — the difference between what you normally spend and what you’re spending in temporary living.
When Does Loss of Use Coverage Kick In?
This coverage activates when your home is deemed uninhabitable because of a covered event. In Rhode Island, that might include:
Fire damage
Severe wind or hurricane damage
Water damage from burst pipes or storms
Other perils listed in your policy
Evacuation ordered by civil authorities because of nearby damage
If a local authority tells you not to return due to safety concerns — even if your home itself isn’t physically damaged — your loss of use coverage may still apply.
How Much Coverage Do You Get?
Most homeowners insurance policies include a loss of use limit tied to your dwelling coverage — often about 10–30% of that amount.
For example:
If your home’s dwelling coverage is $300,000 and your loss of use limit is 20%, you could have up to $60,000 to cover extra living costs while your home is being repaired.
What Loss of Use Doesn’t Cover
It’s also important to know what loss of use won’t pay for:
Your ongoing mortgage payments
Normal, everyday expenses you’d have anyway
Damage or displacement from perils not covered in your home policy (like flooding without flood insurance)
In other words, it’s meant to help you maintain your standard of living, not upgrade it.
Fair Rental Value: A Win for Landlords
If you rent out part of your home and that rental unit becomes unlivable due to a covered event, loss of use can also cover lost rental income — often called fair rental value coverage. It reimburses you for what you would have earned while repairs are underway.
Why This Matters in Rhode Island
Between nor’easters, coastal wind storms, heavy snow, and occasional flooding risk (when flood insurance is in place), Rhode Island residents can face situations where loss of use coverage becomes essential. Having the right limits can protect your finances and peace of mind if you’re displaced.
Final Thought
Loss of use coverage is one of those unsung heroes of home insurance — quiet until catastrophe hits, then suddenly very loud and very needed. Knowing how it works, what it pays for, and how much you have can make the difference between financial strain and smooth recovery.
Because when life throws the unexpected at your home, you deserve insurance that lets you focus on restoring your life, not just counting pennies.
