In homeowners policies, which coverage addresses indirect losses?

The coverage that addresses indirect losses in homeowners policies is often referred to as "Coverage D," which is specifically designed to cover loss of use. This coverage comes into play when a homeowner cannot reside in their home due to a covered loss, such as a fire or other disaster that requires repairs. It provides compensation for the additional living expenses the insured incurs while their home is being repaired or rebuilt. This can include costs for temporary housing, meals, and other necessary expenses that are incurred as a result of the inability to occupy the home.

In contrast, other coverages focus primarily on direct property damage. Coverage A typically covers the structure of the home itself, Coverage B covers other structures on the property, and Coverage C addresses personal property. While these coverages deal with direct losses to the property and belongings, Coverage D specifically recognizes the financial impact of being displaced from one's home, making it essential for addressing indirect losses.