- If you are forced to leave your rental due to a covered cause, your renters insurance would likely help cover the cost of a hotel or motel stay (or Airbnb rental).
- Importantly, your policy will likely only reimburse you for additional costs above and beyond what you’d normally spend if you were at home.
- Your policy may also help cover additional expenses you incur, like food delivery, laundry, pet boarding, or storage fees (even if you choose to stay with friends or family, and not at a hotel).
- Hotel stays would likely not be covered if the reason you left your rental was flooding, an earthquake, or a widespread power outage or water outage.
In certain cases, your renters insurance will help cover the cost of hotel stays (and other additional temporary living expenses) if you’re displaced from your home due to specific causes.
The important thing here is that you’ll be reimbursed for the difference between what you normally spend at home, and what you’re spending while you can’t be at home. For example: If your monthly rent is $800, and a hotel stay for a month is $1,100, you might be able to claim the difference of $300.
This part of your policy is known as “Loss of Use.” Let’s take a look at how it works, what you can expect, and when it would apply.
What is displacement?
In the realm of renters insurance, displacement refers to the situation where you are unable to live in your rental home due to damage or a covered peril, such as a fire or severe weather damage. When this happens, your home is deemed uninhabitable, and you must temporarily relocate to a safe living space while repairs are underway.
For example, imagine smoke damage from a wildfire renders your apartment unlivable; you would need to find alternative accommodation until it’s safe to return.
Does renters insurance cover displacement?
Yes, a renters insurance policy can generally cover displacement, under Loss of Use coverage, as long as the reason you are displaced from your home is due to a covered peril.
Loss of Use (LoU) coverage is an important piece of your renters insurance policy (which also includes personal property coverage and liability coverage for renters).
Loss of Use is coverage that kicks in if a covered peril-say, a fire, or windstorm-damages your rented home and you’re displaced from your home and unable to live in it while repairs are being made. It covers the additional temporary living expenses that you incur during this time.
When does renters insurance cover hotel stays?
Your renters insurance policy will often help cover the cost of hotel or motel stays, beyond what you are currently paying for rent. But it depends on the reason you had to leave your rental.
Imagine a scenario where a pipe bursts in your apartment, or a kitchen fire scorches the walls. While your landlord scrambles to get it fixed or make repairs, you can’t exactly live in a waterlogged or smoke-damaged home.
That’s where Loss of Use comes in. If your policy has Loss of Use coverage (which most standard policies do), it can cover the additional cost of comparable temporary housing-like a hotel or a short-term rental.
It’s not meant to upgrade you to a luxury suite at the Ritz, but it will help put a reasonable roof over your head.
When would renters insurance not cover your hotel stay?
Most renters insurance policies don’t cover damage from certain natural disasters, like floods and earthquakes. Always check your policy’s list of covered perils.
What other expenses might be covered?
Beyond your hotel accommodation, you’ll likely rack up other expenses if you are displaced from your rental home.
Food is an obvious one, since you might be ordering more takeout than usual. Can you claim these additional meal expenses?
The answer is typically yes. But remember, if you generally spend $500/month on food at home, and find yourself spending $800/month during the Loss of Use period-you’ll be able to claim the difference of $300, not the full amount.
Here are a few other categories that you may be able to claim later-so remember to keep your receipts!
- Laundry
- Moving costs and fees
- Storage units
- Parking
- Pet accommodation
How long will renters insurance pay for your hotel stay?
Many renters insurance policies will cover additional temporary living expenses for up to 12 or 24 months while you are displaced from your home, or until your home is habitable again, whichever comes first.
Lemonade’s Loss of Use coverage would last for a maximum of 24 months.
But here’s the thing: where you live makes a huge difference in how far that coverage stretches. A hotel in Boston at $320/night will eat through your benefits way faster than one in Kansas City at $198/night.
Here’s what you’re looking at for average nightly rates in hotels with a minimum 3-star rating in major U.S. cities:
| City | Average rate per Night |
| Boston, MA | $320 |
| Jersey City, NJ | $310 |
| New York, NY | $284 |
| Raleigh, NC | $258 |
| Austin, TX | $252 |
| Detroit, MI | $236 |
| Boise, ID | $236 |
| Madison, WI | $235 |
| Nashville, TN | $227 |
| Durham, NC | $226 |
| Albuquerque, NM | $224 |
| Lexington, KY | $224 |
| Worcester, MA | $221 |
| Long Beach, CA | $215 |
| Cincinnati, OH | $212 |
| Buffalo, NY | $205 |
| Rochester, NY | $205 |
| Anchorage, AK | $204 |
| Sacramento, CA | $202 |
| Kansas City, MO | $198 |
Source: Oysterlink
How do you file a claim for your hotel stay or other expenses?
In most cases, you would initially have to pay out-of-pocket for your temporary living expenses and then file a claim to be reimbursed by your insurance company later.
This is how most insurance claims, including those for Loss of Use, typically work.
Once you’ve made your claim, your insurance company will usually review and approve it before they reimburse you. They may require receipts and a detailed accounting of your additional temporary living expenses to ensure they fall within your policy limits and they are due to the covered peril.
In some instances, especially in cases of significant disasters, insurance companies may
provide some funds up front to help cover immediate costs.
Would loss of use also cover the cost of an Airbnb rental?
Absolutely! In most cases, Loss of Use coverage isn’t limited to traditional hotels. It also extends to temporary accommodations like short-term rentals, including Airbnb.
The principle remains the same: If a covered peril displaced you from your rented home, the Loss of Use coverage can help with the costs of a comparable temporary living situation.
As always, the keyword here is “comparable.” So, if you were living in a two-bedroom apartment, your policy is likely not going to cover a swanky five-bedroom beachfront Airbnb rental.
Would renters insurance pay for my pet’s accommodation?
If you can’t stay in your home and have to go to a hotel, you may also need to find separate accommodation for your pet.
Some insurance companies, including Lemonade, do cover reasonable additional boarding fees under the Loss of Use coverage. (FYI, for those with a fur fam: Lemonade also offers pet health insurance that you can bundle with your renters policy, unlocking savings on both-among other reasons why pet parents who rent should consider getting their cat or dog covered.)
Would my landlord have to pay for a hotel, if I don’t have renters insurance?
In general, landlords are not usually required to cover these expenses, particularly if the event was beyond their control (like a natural disaster).
If the damage to the property was due to the landlord’s negligence, then they might be legally responsible for your housing costs while the property is uninhabitable. But if the damage was due to an accident, a natural disaster, or the actions of a tenant or third party, the landlord typically wouldn’t be held liable.
