What determines the amount payable for Coverage D (Loss of Use) under a homeowners policy?

The amount payable for Coverage D (Loss of Use) under a homeowners policy is determined by the amount of coverage on the dwelling. This is because Coverage D is designed to pay for additional living expenses incurred when the insured home becomes uninhabitable due to a covered loss. The policy typically specifies a percentage of the total dwelling coverage; therefore, the higher the dwelling coverage amount, the greater the potential benefit for loss of use. This ensures that policyholders can cover their additional living expenses—like temporary housing and other necessary costs—at a level commensurate with the overall value of their property.