In homeowners policies, which coverage addresses indirect losses?

Coverage D in homeowners insurance policies specifically refers to "Loss of Use" or "Additional Living Expenses" coverage. This portion of the policy is designed to cover indirect losses that occur when a home becomes uninhabitable due to a covered peril, such as fire or storm damage.

When the primary dwelling is damaged and the homeowner cannot live in it, Coverage D will help pay for additional living expenses incurred during the period of displacement. This includes costs like temporary housing, increased food expenses, and other necessary expenses that go beyond what the homeowner would typically incur under normal circumstances.

Understanding this coverage is essential for homeowners, as it provides financial protection in situations where repairs are needed and living arrangements must change. The distinction between direct and indirect losses is crucial here—while direct losses involve the physical damage to the property, indirect losses pertain to the consequential impacts of such damage, making Coverage D a critical element for ensuring a homeowner's financial stability during a recovery period.