Living Displacement Protection (Loss of Use)

(OCT Section 3)

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Loss of Use coverage applies when a covered loss makes the home uninhabitable and you are forced to live elsewhere temporarily.

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This coverage does not pay to repair the home.

 

It pays for the additional cost of living while repairs are being made.

 

That distinction is important.

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What Loss of Use Actually Covers

 

Loss of Use typically reimburses expenses such as:

• Temporary housing

• Increased food costs

• Laundry and basic living expenses

• Other necessary costs caused by displacement

 

It does not replace your normal living expenses.
It pays the difference between your normal costs and what you must spend due to displacement.

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Triggers Matter

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Loss of Use is only triggered when:

• The home is uninhabitable

• Due to a covered loss

 

If the underlying damage is excluded, Loss of Use usually does not apply.

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That’s why this section sits after Core Property Protection and before liability:

• It depends on property damage

• But affects daily living, not the structure itself

 

Limits and Duration

 

 

Loss of Use is often expressed as:

• A dollar limit

• Or a percentage of Dwelling Coverage (Coverage A)

Some policies also impose:

• Time limits

• Reasonableness standards

• Documentation requirements

When filling out the OCT:

• Record the limit

• Note any stated duration or conditions

 

Two policies with identical dwelling limits can provide very different displacement protection depending on how Loss of Use is structured.

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Why This Section Matters

Loss of Use is frequently misunderstood because:

• It sounds generous

• But is highly conditional

Underestimating this coverage can create significant financial stress during a major loss — even when the home itself is insured correctly.

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This section ensures you understand how livable your policy actually is during a claim, not just how it repairs property.

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Liability & Medical Exposure

(OCT Section 4)

 

Liability and medical coverages protect you from claims made by other people, not damage to your home.

 

These coverages respond to situations where:

• Someone is injured on your property

• You are legally responsible for injury or property damage to others

They are not tied to Dwelling Coverage and should be evaluated separately.

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Personal Liability Coverage

 

Personal Liability coverage applies when you are legally responsible for:

• Bodily injury to others

• Property damage to others

 

This can include incidents:

• On your property

• Away from your property, depending on the situation

 

Liability coverage pays for:

• Legal defense costs

• Settlements or judgments, up to the policy limit

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When recording this coverage in the OCT, focus on:

• The limit

• Whether an umbrella policy is referenced separately

 

The key question is not how likely a claim is — but how large a claim could be.

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Medical Payments to Others

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Medical Payments coverage pays for minor medical expenses incurred by others, regardless of fault.

This coverage is:

• Limited in amount

• Designed to resolve small incidents quickly

• Not a substitute for liability coverage

 

Medical Payments does not require:

• A lawsuit

• Proof of negligence

 

Because of this, it often prevents small incidents from escalating into larger claims.

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Why These Coverages Matter Together

 

Liability and medical coverages:

• Protect your assets

• Protect future income

• Reduce legal exposure

 

They are often overlooked because they don’t relate directly to property repair, but they can create long-term financial consequences if limits are insufficient.

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This section ensures you evaluate people-related risk, not just physical damage.

 

What Comes Next

 

With property protection, displacement coverage, and liability exposure understood, the remaining sections focus on how policies behave under stress:

 

Next up:

• Section 5: Covered Perils, Coverage Scope & Deductibles