What is a “loss of use” claim and how is it calculated?
A “loss of use” claim is a type of claim that owners of property insured by a fire insurance policy can file with their insurance provider. The purpose of this claim is to recover any economic losses incurred due to the damage caused by a fire. In North Carolina, a “loss of use” claim is calculated by computing the difference between the insured’s actual losses and the value of the property before the fire. The insured must provide evidence of their claimed losses, such as receipts, canceled checks, or appraisals, in order to prove the amount of their claim. This evidence can include any financial losses resulting from disruption of services, lost profits, or relocation costs. The insured can also be compensated for the inconvenience of being displaced from the property. The insured must also prove that the damage caused by the fire was beyond reasonable repair, or that the repair costs would be too expensive in comparison to the property’s pre-fire value. The insurance company will also review any additional insurance coverage the insured may have, such as a business interruption policy, in order to determine the amount of compensation that can be approved. To qualify for a “loss of use” claim, the insured must have taken all reasonable steps to reduce or prevent any further losses. In North Carolina, once the claim is filed and approved by an insurance provider, the insured is entitled to the full amount of their loss without any deductions.
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