Some home owners must find a temporary place to stay such as a rental unit or hotel while repairs are made to a home that was severely damaged by an insured loss like water or fire. Extra living expenses and the costs of rental or hotel could be covered by "additional living expense" insurance if you have a policy which includes it. Provided below are answers to some of the most common questions relating to additional living expense insurance.
Who's going to pay the extra expenses?
The home insurance company will cover the extra costs involved when a home owner has additional living expense coverage, as long as the damage to the home was one of the insured perils that the policy covers.
When looking at additional living expense insurance, what does "insured peril refer to?
Most home insurance policies today provide comprehensive protection which will cover you for a number of types of loss, including fire, smoke, windstorm, water, theft, and much more, subject to exclusions and conditions. Certain perils will not be covered at all, such as flood or landslide.
When a covered peril occurs, causing enough damage to your home that it is no longer habitable, your insurance will reimburse your additional living expenses, up to the limit on your policy.
What types of expenses are considered "additional"?
While your home is being repaired, you will continue to be responsible for the regular ongoing expenses. Things like:
Mortgage payments;Insurance premiums;Transportation costs; and,Groceries.
Costs that the home owner would not have had to pay otherwise, are what the policy refers to when they say "additional".
Rental costs for a temporary home, or the bills for a hotel. Higher expenses for food. Restaurants are the only option when someone is stuck in a hotel room with no kitchen. What the insurance provider will pay is actually not the entire bill at the restaurant, but only the difference between what the policy holder would have paid for groceries, and the restaurant bill.
Extra transportation expenses. Some people can simply walk to work and school, but the hotel may be further away, and now you have to take a bus or drive the additional distance.
What happens for those who have rental units in their home?
When damage to the entire home is severe, the rental unit payments that the home owner was accustomed to receiving will not be part of their regular monthly income until repairs on the home are all finished. You no longer will be receiving the rental money, plus, you will have to continue to make mortgage payments. A landlord will have protection from this situation if they choose to purchase rental income insurance from their insurance company.
In the case of damage to a home business, what happens?
If you were running a business from your home, you may need to rent a studio or office space temporarily. When the business must be suspended, is the lost income covered? These are not covered by the additional living expenses, as they are actually business costs. It would be wise to ask your home insurance provider for extra coverage for these things. A commercial insurance policy might be what you require.
When a tragedy like this occurs, it's a very tough time for the homeowner. But having the right home insurance can certainly take away some of the worry.
Who's going to pay the extra expenses?
The home insurance company will cover the extra costs involved when a home owner has additional living expense coverage, as long as the damage to the home was one of the insured perils that the policy covers.
When looking at additional living expense insurance, what does "insured peril refer to?
Most home insurance policies today provide comprehensive protection which will cover you for a number of types of loss, including fire, smoke, windstorm, water, theft, and much more, subject to exclusions and conditions. Certain perils will not be covered at all, such as flood or landslide.
When a covered peril occurs, causing enough damage to your home that it is no longer habitable, your insurance will reimburse your additional living expenses, up to the limit on your policy.
What types of expenses are considered "additional"?
While your home is being repaired, you will continue to be responsible for the regular ongoing expenses. Things like:
Mortgage payments;Insurance premiums;Transportation costs; and,Groceries.
Costs that the home owner would not have had to pay otherwise, are what the policy refers to when they say "additional".
Rental costs for a temporary home, or the bills for a hotel. Higher expenses for food. Restaurants are the only option when someone is stuck in a hotel room with no kitchen. What the insurance provider will pay is actually not the entire bill at the restaurant, but only the difference between what the policy holder would have paid for groceries, and the restaurant bill.
Extra transportation expenses. Some people can simply walk to work and school, but the hotel may be further away, and now you have to take a bus or drive the additional distance.
What happens for those who have rental units in their home?
When damage to the entire home is severe, the rental unit payments that the home owner was accustomed to receiving will not be part of their regular monthly income until repairs on the home are all finished. You no longer will be receiving the rental money, plus, you will have to continue to make mortgage payments. A landlord will have protection from this situation if they choose to purchase rental income insurance from their insurance company.
In the case of damage to a home business, what happens?
If you were running a business from your home, you may need to rent a studio or office space temporarily. When the business must be suspended, is the lost income covered? These are not covered by the additional living expenses, as they are actually business costs. It would be wise to ask your home insurance provider for extra coverage for these things. A commercial insurance policy might be what you require.
When a tragedy like this occurs, it's a very tough time for the homeowner. But having the right home insurance can certainly take away some of the worry.
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