What is a “loss of use” claim and how is it calculated?

A “loss of use” claim is a type of insurance claim typically associated with a fire insurance claim in the state of Washington. A “loss of use” claim occurs when a person is no longer able to use their home or business due to damage from a fire. This can range from partial to total destruction and can be due to any number of factors, such as smoke and water damage, disruption of utility services, or physical destruction of building materials. When calculating a “loss of use” claim, the insured must first determine the fair rental value (FRV) of the home or business. This value is based on the estimate of what the property would have been worth to rent if it had not been damaged by fire. The FRV is then multiplied by the number of days that the home or business was unusable as a result of the fire. This is the total amount of compensation that the insured may receive for their “loss of use” claim. It is possible for an insurer to deny or reduce a “loss of use” claim if the damage was caused by the insured’s own neglectful behavior. As such, it is important for an insured to take all necessary measures to protect their property from fire, such as installing smoke alarms, fire sprinkler systems, proper electrical wiring, and other fire safety measures. In addition, it is important for an insured to keep detailed records of all fire-related damage and expenses, as these can be used to support a “loss of use” claim. An experienced fire insurance attorney can help an insured navigate the complexities of filing a “loss of use” claim, often securing a larger compensation package than they would have received on their own.

What is a “loss of use” claim and how is it calculated?

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