If your home is damaged by fire, water, or another type of insured loss, you may have to move into a hotel or rental home while repairs are being done. 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. In this article, we will be going over some of the questions about additional living expense insurance that many policy holders may have.
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.
The "insured peril" part of additional living expenses refers to what, in particular?
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 the damage that happens to your home makes it so that it can not be lived in, the insurance will pay your extra living costs, up to a the limit that the policy covers, as long as it is an insured peril.
What do they mean exactly by "additional" expenses?
While your home is being repaired, you will continue to be responsible for the regular ongoing expenses. These might include:
Mortgage payments;Insurance premiums; Transportation costs; and, Groceries.
"Additional" expenses are ones you wouldn't normally have had, such as:
Rental costs for a temporary home, or the bills for a hotel. Extra food costs. Restaurants are the only option when someone is stuck in a hotel room with no kitchen. Your insurance won't cover the entire restaurant bill, but it will cover the difference between what you would normally have spent on groceries, and what you had to pay at the restaurant.
Higher expenses for transportation. If you need to take public transportation or drive when you or your family regularly walks to school or work, this will cost you more.
What happens for those who have rental units in their home?
If your home had a basement suite which you rented out, and the whole home was damaged or destroyed, you won't be receiving your regular rent until the home is repaired, and your tenants can move back in. As mentioned above, you're still responsible to pay for your mortgage, but now you're missing that rent money you may have been counting on. To protect you against lost rental income, you should consider purchasing rental income insurance.
What happens if there was a home business that was damaged?
If you were running a business from your home, you may need to rent a studio or office space temporarily. And if you can't continue your business, what about your lost income? 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. Some people should have a commercial insurance policy as well.
When a tragedy like this occurs, it's a very tough time for the homeowner. Much of the stress can be removed if the homeowner has the proper kind of home insurance coverage.
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.
The "insured peril" part of additional living expenses refers to what, in particular?
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 the damage that happens to your home makes it so that it can not be lived in, the insurance will pay your extra living costs, up to a the limit that the policy covers, as long as it is an insured peril.
What do they mean exactly by "additional" expenses?
While your home is being repaired, you will continue to be responsible for the regular ongoing expenses. These might include:
Mortgage payments;Insurance premiums; Transportation costs; and, Groceries.
"Additional" expenses are ones you wouldn't normally have had, such as:
Rental costs for a temporary home, or the bills for a hotel. Extra food costs. Restaurants are the only option when someone is stuck in a hotel room with no kitchen. Your insurance won't cover the entire restaurant bill, but it will cover the difference between what you would normally have spent on groceries, and what you had to pay at the restaurant.
Higher expenses for transportation. If you need to take public transportation or drive when you or your family regularly walks to school or work, this will cost you more.
What happens for those who have rental units in their home?
If your home had a basement suite which you rented out, and the whole home was damaged or destroyed, you won't be receiving your regular rent until the home is repaired, and your tenants can move back in. As mentioned above, you're still responsible to pay for your mortgage, but now you're missing that rent money you may have been counting on. To protect you against lost rental income, you should consider purchasing rental income insurance.
What happens if there was a home business that was damaged?
If you were running a business from your home, you may need to rent a studio or office space temporarily. And if you can't continue your business, what about your lost income? 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. Some people should have a commercial insurance policy as well.
When a tragedy like this occurs, it's a very tough time for the homeowner. Much of the stress can be removed if the homeowner has the proper kind of home insurance coverage.
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