Connect with us

Personal Finance

How ‘loss of use coverage’ can help with costs after a natural disaster

Published

2 years ago

on

Mobile homes surrounded by flood water after Hurricane Milton made landfall, in St. Petersburg, Florida, U.S. October 10, 2024.

Octavio Jones | Reuters

If your home is temporarily uninhabitable after a natural disaster, a provision in your homeowners or renters insurance policy may help you with new lodging and other living expenses.

Insured wind and flood damage from Hurricane Helene is estimated to be up to $17.5 billion, according to CoreLogic, a real estate data site. Insured losses from Hurricane Milton could range from $30 billion to $60 billion, per Morningstar DBRS.

Homeowners and renters affected by a natural disaster can ask about so-called “loss of use” or “additional living expenses” coverage from their insurance providers, experts say.

The provision is meant to help cover reasonable living expenses if your home is not suitable to live in as a result of a covered peril such as a hurricane, fire or burst pipe.

“I don’t know of any homeowners policy that doesn’t have it already there,” said Karl Susman, president and principal insurance agent of Susman Insurance Services, Inc. in Los Angeles. 

More from Personal Finance:
Key steps to file a claim after a natural disaster
What to know before your hire a ‘questionable’ contractor
Climate change could cost nearly $500,000

As you file a claim, it will be important to ask your insurance company about the loss of use coverage and how quickly can it kick in, said Shannon Martin, a licensed insurance agent and analyst at Bankrate.com.

“If you call your carrier, they might be able to expedite the loss of use claim filing for you and issue a check early so that you’re not stuck trying to figure out how to pay for separate housing,” she said.

Here’s what the coverage is and what to consider before you use it, according to experts.

How loss of use coverage works

Loss of use coverage is a provision that is typically included in your homeowners insurance policy. It’s usually about 20% of the dwelling coverage and is paid out in the event that the home becomes uninhabitable and a policyholder needs funds for living expenses while the home is repaired or rebuilt, experts say. Eligible expenses might include a hotel or rental home, food, pet boarding or storage fees, among others.

For example, if you’re ensuring a house for $100,000, and that’s what it costs to rebuild the house, that is considered the dwelling coverage, Susman said.

“Then the policy would automatically come with $20,000 in coverage for loss of use,” he said.

Hurricane Milton slams Florida

“That way you and your family can pay for your hotel and pay for food, because you might be separated from your home for an extended period of time,” Martin said.

Renters insurance typically has a similar provision, as would condominium policies, Susman said.

For renters and condo insurance, the primary coverage is not dwelling because you’re insuring personal property rather than the building, he said. You’ll typically get 20% of the personal property coverage for loss of use, he said.

Ask your insurer about any policy restrictions. There may be expense-specific dollar caps or time limits to claim loss of use coverage.

‘It’s not intended to be a long-term solution’

Loss of use coverage can help homeowners cover living expenses after a natural disaster. However, the money is meant to be a short-term solution, not a long-term fix, experts say.

“It’s generally not intended to be a long-term solution,” said Jeremy Porter, head of climate implications research at First Street Foundation, an organization focused on climate risk financial modeling in New York City. “It’s generally not enough money to carry people through an extended period of time.” 

That can be a problem because what it would cost to move out would be very different after a major disaster than during more typical times, Susman said, as there’s often less housing available and hotels may raise their prices amid demand.

While the coverage is meant to be temporary, repairs and broader financial recovery take a long time after major disasters, experts say.

“It takes a long time to recoup and recover,” said Loretta Worters, a spokeswoman for the Insurance Information Institute.

Remember you can make a claim on your policy and get assistance from the Federal Emergency Management Agency at the same time, said Susman.

You might be able to use funds from the government to help you stay in a hotel for a month, then get a place closer to your home and use your loss of use coverage to pay for the difference, Martin said. 

Related Topics:
Continue Reading

Personal Finance

$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

Published

7 days ago

on

August 8, 2026

By

The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

Continue Reading

Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

Published

1 week ago

on

August 7, 2026

By

Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

Continue Reading

Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

Published

2 weeks ago

on

August 1, 2026

By

As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

Continue Reading

Trending