In HO policies, which coverage provides protection against an indirect or consequential loss?

• A. Coverage D - Loss of Use
• B. Coverage E - Personal Liability
• C. Coverage C - Personal Property
• D. Coverage F - Medical Payments

Answer: (A)

Indirect or consequential losses in a homeowners policy are addressed by Loss of Use coverage. When a covered peril damages your home and you can’t live there, this coverage helps pay the extra costs to maintain your standard of living—like hotel bills and meals (Additional Living Expenses) or the loss of rental income if you normally rent out the home (Fair Rental Value). It focuses on the expenses incurred because the dwelling is uninhabitable, not on repairing the dwelling itself or paying for the property’s contents, liability, or medical expenses. That’s why Loss of Use is the correct coverage for protection against indirect losses.