What is the purpose of loss of use coverage?

Loss of use coverage is specifically designed to provide financial assistance for additional living expenses incurred when a home or property becomes uninhabitable due to a covered peril, such as a fire or severe storm damage. This type of coverage ensures that policyholders are not financially burdened by having to find temporary housing or cover other necessary living costs while their primary residence is being repaired or rebuilt.

This means costs like hotel bills, restaurant meals, and other related expenses will be covered, helping individuals maintain a standard of living during their displacement. The other options do not align with the purpose of loss of use coverage; for example, compensation for damaged possessions concerns personal property coverage, while income loss due to business closure may pertain to business interruption insurance. Similarly, commuting expenses do not fall under the scope of loss of use coverage, as they relate to everyday transportation rather than costs incurred due to the inability to live in one’s dwelling.