What does loss of use cover in a household insurance policy provide?

Loss of use coverage in a household insurance policy is designed to help policyholders manage the costs they incur when their home becomes uninhabitable due to a covered peril, such as fire or severe water damage. More specifically, this coverage provides compensation for additional living expenses that the insured must pay while their home is being repaired or rebuilt.

For example, if a homeowner has to stay in a hotel, eat out, or incur extra costs related to temporary housing, loss of use coverage would reimburse those expenses, thereby alleviating financial stress during a challenging time. This coverage ensures that the policyholder can maintain their standard of living, despite the disruption caused by loss of their home.

In contrast, options related to replacing lost items, repairing household damage, or reimbursing legal expenses do not encompass the specific nature of loss of use, which is fundamentally about covering additional living costs rather than direct property loss or damage.