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. The cost of the hotel, and other increases in your living expenses, can be paid by your "additional living expense" insurance. Here, we will have a look at frequently asked questions about additional living expense insurance, and providing some answers.
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. Floods and landslides for a couple of examples, are instances that are not insured perils.
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?
As the damages are being fixed, you still need to pay all of your regular expenses that you have. These might include:
Mortgage payments; Insurance premiums;Transportation costs; and,Groceries.
Expenses that are "additional" include costs that you wouldn't have incurred otherwise, like:
Rental costs for a temporary home, or the bills for a hotel. Higher expenses for food. Many hotels do not have a kitchen, so people are forced to eat in restaurants for their meals. The difference between your regular grocery costs and the restaurant bill will be covered by the insurance, not the entire bill.
Increased transportation costs. Maybe you or your kids normally walked to work or school, but while in the hotel, it was necessary to drive or take public transit.
If the home has tenants that are affected, what then?
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. You no longer will be receiving the rental money, plus, you will have to continue to make mortgage payments. To protect you against lost rental income, you should consider purchasing rental income insurance.
In the case of damage to a home business, what happens?
Office or studio space must sometimes be needed to continue to do your home business. 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. Some people should have a commercial insurance policy as well.
Times like these are incredibly hard on a home owner. 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.
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. Floods and landslides for a couple of examples, are instances that are not insured perils.
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?
As the damages are being fixed, you still need to pay all of your regular expenses that you have. These might include:
Mortgage payments; Insurance premiums;Transportation costs; and,Groceries.
Expenses that are "additional" include costs that you wouldn't have incurred otherwise, like:
Rental costs for a temporary home, or the bills for a hotel. Higher expenses for food. Many hotels do not have a kitchen, so people are forced to eat in restaurants for their meals. The difference between your regular grocery costs and the restaurant bill will be covered by the insurance, not the entire bill.
Increased transportation costs. Maybe you or your kids normally walked to work or school, but while in the hotel, it was necessary to drive or take public transit.
If the home has tenants that are affected, what then?
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. You no longer will be receiving the rental money, plus, you will have to continue to make mortgage payments. To protect you against lost rental income, you should consider purchasing rental income insurance.
In the case of damage to a home business, what happens?
Office or studio space must sometimes be needed to continue to do your home business. 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. Some people should have a commercial insurance policy as well.
Times like these are incredibly hard on a home owner. But having the right home insurance can certainly take away some of the worry.
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