Covering Living Expenses
Another basic coverage category of homeowner's insurance is additional living expenses.
If your home is damaged or destroyed and the damage is covered under your homeowner's insurance, you may have to live elsewhere while your home is being repaired. In that case, you're likely to incur additional living expenses.
Limits for additional expenses generally exist under your basic policy. These limits vary with insurer, but the Insurance Information Institute suggests that coverage is typically about 20% of the insurance that covers your dwelling.
For example, if your dwelling coverage is $500,000, your living expense coverage would be $100,000.
If you're renting out a room in your house and sustain insured damages to your home, additional-living-expense coverage often pays for the loss of rental income.