The worst part about having home insurance other than paying for it is when you have to file a claim. It involves inconvenience, time, patience and sometimes, if you weren't properly informed, some extra expense you didn't prepare for.
In the event of a total loss, you'll find yourself having to live somewhere else while your home is repaired or rebuilt. That is hard enough.
When in situations like this, one provision in your policy that can help you escape the financial ruin is what we know as Loss of Use.
It's a coverage on your Grapevine home insurance policy that protects your finances when you can't live in your home during a covered claim.
Loss of Use Explained
Say your home is damaged or destroyed and you can't live within its walls. Damage from a hail claim usually isn't enough to bring on this scenario. But, if we see soccer ball-sized hail which perforates your roof and allows water inside, that's a different ballgame. You don't want to live in a home where the water is leaking from above.
What if a massive tree falls on your home? Sure, we can play the game of what if and some things may sound preposterous, but we have seen some weird and wacky situations happen to clients in North Texas.
What happens when you can't live in your home?
If you have a mortgage through a bank lender, you are still responsible for paying it.
You also have to find a place to live. Sure, you may have family in the area or even out of the area, but what if rebuilding your home takes more time than that situation can handle?
Do you want to pay for two places to live. No.
This is where Loss of Use is intended to help.
Loss of Use means the insurance company will take on the cost of housing you temporarily while your home is repaired/rebuilt up to a certain dollar amount known as the limitations on the policy.
How to Calculate Loss of Use
There's no one-size-fits-all answer here. The goal of the insurance company is for you to find a living situation that is similar to the neighborhood where your home is being repaired/rebuilt.
Some carriers will provide an unlimited benefit with reasonable parameters on the associated costs, location and time to repair.
On the other hand, most companies set a limit on the payout and this limit is listed on your policy declarations page.
The insurance carrier is not in the charitable organization category, so don't expect to receive an exorbitant amount that allows you live high on the hog outside of the range of what your home and neighborhood currently cost.
You won't get to enjoy that penthouse suite in Uptown Dallas if you call Grapevine home.
You will want your Loss of Use limit for coverage amount to be a sustainable amount to cover your rent for a year's time. You'll also want it to account for temporary hotel stays until you locate a place to stay for the longer term.
Don't overlook this line item on your home insurance policy. Consider it carefully and ensure your coverage. That's where we can help. We want to see that coverage equal the right percentage of your dwelling value to help you feel secure if every you are confronted with this terrible scenario.
As an independent insurance agent, we can help make sure you find the right carrier that will place the correct amount of Loss of Use to you don't lose.