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. If you have "additional living expense" insurance, these extra living costs are normally covered by this. Here, we will have a look at frequently asked questions about additional living expense insurance, and providing some answers.
Where will money for these additional costs come from?
Well, if you had the right home insurance, including "additional living expense" coverage, and the loss was caused by an "insured peril", you may just find these extra expenses will be paid by your insurance provider.
What does insured peril mean in relation to additional living expense insurance?
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. There are exceptions that are not covered, perils like landslide or floods, for example.
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?
Your regular expenses must be paid during the time that your home is being repaired from the damages. This concerns expenses such as:
Mortgage payments;Insurance premiums;Transportation costs; and,Groceries.
Expenses that are "additional" include costs that you wouldn't have incurred otherwise, like:
Hotel related costs, or a temporary home rental. Extra food costs. If there were no kitchen facilities in the hotel, you may have had to eat in a restaurant all week. 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.
Increased transportation costs. 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 if part of the home was rented out?
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. Not only will you still be paying mortgage, the income from your rental unit will not be available. 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. If the business can not be done temporarily, is lost income coverage included? These are not covered by the additional living expenses, as they are actually business costs. Be sure to talk to your insurance agent about obtaining coverage. You may need to get a commercial insurance policy.
Times like these are incredibly hard on a home owner. But having the right home insurance can certainly take away some of the worry.
Where will money for these additional costs come from?
Well, if you had the right home insurance, including "additional living expense" coverage, and the loss was caused by an "insured peril", you may just find these extra expenses will be paid by your insurance provider.
What does insured peril mean in relation to additional living expense insurance?
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. There are exceptions that are not covered, perils like landslide or floods, for example.
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?
Your regular expenses must be paid during the time that your home is being repaired from the damages. This concerns expenses such as:
Mortgage payments;Insurance premiums;Transportation costs; and,Groceries.
Expenses that are "additional" include costs that you wouldn't have incurred otherwise, like:
Hotel related costs, or a temporary home rental. Extra food costs. If there were no kitchen facilities in the hotel, you may have had to eat in a restaurant all week. 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.
Increased transportation costs. 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 if part of the home was rented out?
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. Not only will you still be paying mortgage, the income from your rental unit will not be available. 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. If the business can not be done temporarily, is lost income coverage included? These are not covered by the additional living expenses, as they are actually business costs. Be sure to talk to your insurance agent about obtaining coverage. You may need to get a commercial insurance policy.
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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