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Can You Make a Property Insurance Claim That Includes Damage for Loss of Use?

Fri May 11th, 2018 on     Property Insurance,    

In Florida, where hurricanes, tropical storms, and other natural disasters are a regular feature of life, property insurance claims frequently involve “loss of use” coverage issues.  Standard property insurance coverage does not necessarily cover all the various losses suffered by a policyholder.  Loss of use coverage — which may be its own separate policy, or simply a provision built into an existing homeowner’s insurance or renter’s insurance policy — helps fill in the gaps, so to speak.

What is the Purpose of Loss of Use Coverage, Exactly?

Loss of use coverage is rather straightforward in terms of its function — simply put, it is designed to account for losses related to the policyholder’s inability to make normal use of the property.  What constitutes “use” will vary depending on the policy and depending on the particular nature of the loss.

Generally speaking, most loss of use coverage makes provisions for benefits in three different and broadly-applicable situations:

  1. Heightened cost of living
  2. Loss of rental income
  3. Legal prohibition on access

All this legalese may seem confusing at first glance, so let’s do a brief walk-through of some examples to clarify how it all works.

Suppose that you have loss of use coverage through your existing homeowner’s insurance policy.  One day, your primary residence is severely damaged by a hurricane, and as a consequence, you are forced to move out and seek out an alternative residence (at least temporarily).

The damage to your residence is significant enough that it will take up to 6 months to fully repair.  As such, not only do you have to continue to pay your existing mortgage (say, for example, $1,000 per month), but you have to deal with a heightened cost of living from renting a new apartment/house in the interim period (say, for example, an additional $1,200 per month).  Your loss of use claim would therefore be $1,200, since that is the true cost of having lost the normal use of your residence.

Covered living expenses may include:

  • Rental cost of an additional property
  • Cost of relocation
  • Heightened cost of living in new area
  • Cost of storage for personal property
  • And more

In the event that you lose the use of a rental property (and not a primary residence), you are entitled to claim benefits for the fair rental value of the property, seeing as how the existing renter is not required to pay rent for the period of time that the property is rendered uninhabitable.

Loss of Use Coverage Disputes

In the loss of use context, property insurers typically deny benefits on the basis of the loss not actually being covered.

For example, the policy may exclude lightning strikes from coverage, but not fires.  If you lose the use of your residence in a fire (that was caused by a lightning strike), then the insurer may attempt to argue that the exclusion prevents recovery.  These coverage ambiguities often lead to disputes.

If the insurer has no legitimate basis with which to deny your claim, they may instead attempt to minimize their liabilities by disputing the amount of losses you have suffered.  Depending on the circumstances, you may be entitled to sue the insurer (pursuant to a bad faith cause of action) if their actions are not reasonably supported by the evidence.

Speak With a Skilled Miami Property Insurance Lawyer for Comprehensive Assistance

Here at Ver Ploeg & Lumpkin, P.A., our attorneys have several decades of experience helping policyholders submit effective claims and challenge the denial of legitimate property insurance claims, including those that involve issues relating to “loss of use.”

We understand that when disaster strikes, policyholders may be left in uniquely vulnerable situations — from both a financial and emotional perspective, it can be quite a challenge to secure your position after losing the use of your residence.  We advocate aggressively on behalf of our policyholder clients to ensure that they can obtain the benefits to which they are rightfully entitled.  Our results speak for themselves.

Call (305) 577-3996 today to schedule an appointment with an experienced Miami property insurance lawyer here at Ver Ploeg & Lumpkin, P.A.

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