Additional living expenses (loss of use) calculator

If a fire or other covered loss makes your home unlivable, Coverage D pays the increase in what it costs you to live, not your whole living budget. The calculator turns your own numbers into a monthly figure and shows how long your limit would last at that pace.

How to use it

Start with your policy. On the declarations page, Coverage D appears as a dollar amount or as a percentage of Coverage A. Enter your dwelling limit and either the percentage or the dollar limit; a dollar figure overrides the percentage. Then estimate what you would spend each month while displaced:

• Temporary housing: a comparable rental, or hotel nights times 30.
• Extra food: restaurant meals above your normal grocery bill.
• Everything else that rises: mileage, parking, laundry, storage, pet boarding.
• Costs that stop while you are out, such as utilities you no longer pay.
• The months you expect to be out.

Your mortgage, taxes and insurance keep running, so they are not subtracted.

How the math works

Monthly extra cost is temporary housing plus extra food plus other costs, minus the costs that stop. The amount needed is that figure times the months. Your limit lasts the limit divided by the monthly figure. If the amount needed exceeds the limit, the shortfall is what you would pay yourself. A bar chart sets limit against need.

Say, hypothetically, a $350,000 dwelling limit with Coverage D at 20%, which is $70,000. Rent is $3,200 a month, extra food $600, other costs $400, and $300 of costs stop. Extra costs come to $3,900 a month, so a 12-month displacement needs $46,800. The limit would last about 17.9 months, and there is no shortfall.

What it assumes

The 20% default (the typical loss of use limit in the NAIC's consumer guide to home insurance; many policies use 30%) and every monthly figure are editable examples, not market data, and rents and hotel rates vary widely by area and by season after a local disaster. The standard ISO homeowners 3 form (HO 00 03 05 11, May 2011 edition) defines additional living expense as the necessary increase in living expenses to maintain the household's normal standard of living, payable for the shortest time needed to repair or replace the home or, if you relocate permanently, to settle elsewhere. It states no percentage for Coverage D; the limit is whatever the declarations page shows. If you rent out part of the home, fair rental value replaces the rent you lose, under the same combined limit.

Where it stops being right

The form has no month cap, but your insurer's own form may. Some set a time limit in addition to the dollar limit, so check both. The tool does not apply a time limit and assumes your costs stay level. A widespread disaster can push rents up and stretch repairs, which is why a larger Coverage D is worth pricing; the How much homeowners insurance do I need? suggests a figure from your own months and costs. Two related rules: if a civil authority bars you from the home because of damage next door, the standard form pays for no more than two weeks, and costs from cancelling a lease are not covered.

Pay attention to documentation as well. Keep receipts for every added cost and a log of normal costs that stopped, because the claim is for the difference. making an additional living expenses claim covers making the claim, loss of use and additional living expenses explains the coverage itself, and the home insurance claim checklist lists what to do in the first days after a loss.