Does Renters Insurance Cover Hotel Stays? Important Info!
Renting has its positives and negatives. One of the positives is that renters are usually not responsible for any repairs that may arise in the property you are living at. But that also means that you do not have any control over how quickly something gets done. What happens if you are forced out of your rental due to damage or other unlucky events? Will renters insurance cover your stay at another property?
The answer to that question is yes. In most cases, standard renters insurance will cover your hotel stay if you have to vacate a property due to damage or repairs. But, like everything that has to do with insurance, it can be a little more complicated than that.
Typical Renters Insurance Coverage
Most standard renters insurance policies come with something called loss-of-use coverage. This is the part of the policy that will reimburse you if you have to stay in a hotel if your dwelling becomes uninhabitable. Loss-of-use coverage often comes with some stipulations, such as whether the reason for you vacating is a covered loss, proximity to your dwelling, as well as cash and time limits. If you want to know if your policy includes this coverage, you need to read the policy details. As you dig into the meat of your renters insurance policy, there are some key phrases that you want to be on the lookout for.
Common Definitions to Look Out For
Loss-of-use coverage is the thing that compels an insurance company to cover a hotel stay in the case of a loss. Not all renters insurance has this policy. Without it, your insurance company is not obligated to cover your hotel stay even if your rental property is uninhabitable.
Loss-of-use coverage only kicks in due to a covered loss. If the reason you have to vacate your rental property is due to a covered loss, then insurance will cover it. If the reason is not covered, then loss-of-use coverage will not apply to your situation. Some examples of typically covered losses include:
- Wind damage
- Gas explosion
- Burst pipes
- Leakage or overflow from pipes
- Damage from faulty appliances
Each insurance company and individual policy might have different lists as to what counts as a covered loss. So it is a good idea to read up on what exactly your insurance company counts as a covered loss, so that you are not surprised.
Things that are not typically covered are damage caused by yourself or user error, construction due to renovations or improvements, and some acts of God.
The policy limit dictates how much your insurance company will cover. Many policies have limits as to how long you can stay in a hotel or how much money they will dole out. This varies by policy. Some policies only have time limits based on approved hotels. Others have a simple cash limit which allows the policyholder to be flexible with their choice of hotel.
The Devil Is in the Details
Insurance is a complicated business with many legal stipulations and definitions. The exact coverage that you can expect to receive will depend on your individual policy. For example, your insurance company likely won’t cover you if you decide to live in the Ritz Carlton for an extended period while your apartment is fixed. On the other hand, your policy limit might be a simple cash payout of $500, allowing you to stay for two nights at a nice hotel.
Sometimes you will be required to foot the bill on the front end of a hotel stay and get reimbursed down the line. Other times, your insurance company might opt to deal with the hotel directly, especially if they have a relationship with them. Every person and every policy is unique, and different companies elect to do business in different ways. The devil is very much in the details.
Sometimes, your insurance policy will even cover extra expenses like meals out, additional gas, and grocery bills. Living in a hotel can be more expensive than the nightly rate alone. Check your policy to see if any of these extras are included in your loss-of-use coverage.
Check Your Policy Before You Need to File a Claim
The best bet for a smooth insurance claim policy is to know the ins and outs of your policy ahead of time. You do not want to be frantically scrolling through your policy as a burst pipe fills your living room with raw sewage. You want to know ahead of time what your policy covers, what your insurance company is legally obligated to cover, and what the claims process is. Insurance can be slow, and you do not want to be sitting in your car wondering where you are going to stay when something goes wrong in your rental property.
Your insurance policy should be readily available to read. Most people are given a copy when they sign on to the rental insurance policy agreement.
Other things to have on hand before filing an insurance claim are the policy number, your declaration page, and reputable evidence of the damage that caused you to vacate the premises.
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In most cases, basic renters insurance coverage will cover hotel stays in the event of a loss of use of your property. The exact method of how to get reimbursed and what hotels are covered will differ depending on your policy. The best bet is to read your policy and check the details to see exactly what it covers. If you do not have loss-of-use coverage in your policy, you might want to call the insurance company and ask about having it added, just in case.
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