What factor determines the amount an insurer will pay under Coverage D (loss of use)?

The amount an insurer will pay under Coverage D, which covers loss of use, is primarily determined by the amount of coverage on the dwelling. This is because Coverage D is designed to provide financial assistance for additional living expenses incurred when a policyholder's home becomes uninhabitable due to a covered peril. The limits of this coverage are directly tied to the total amount of dwelling coverage the homeowner has selected in their policy.

For example, if the dwelling coverage limit is set at a certain amount, the insurer typically provides a specified percentage of that limit to cover loss of use expenses. This ensures that the financial support available for alternative living arrangements or related expenses reflects the overall risk exposure associated with the dwelling itself.

While other factors like the duration of uninhabitability and types of losses can influence the cost of living expenses, they do not directly dictate the total payout amount. The actual limits laid out in the homeowner's policy fundamentally determine how much coverage is available under Coverage D.