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Helping You Understand Additional Living Expenses Coverage

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Storm Season Is a Good Time to Make Sure You’re Covered for Additional Living Expenses

Additional Living Expenses is insurance coverage that is included in most homeowner, condo owner, and tenant policies.

The coverage comes into effect when a claim is accepted and the insured cannot live in their home while repairs are being made. The covered costs can include living elsewhere until the home is again inhabitable. The amount of coverage is a percentage of the building value, in the case of a homeowner policy; or a percentage of the personal property coverage, in the case of a condo owner or tenant. Different insurance companies offer different limits and percentages.

When there is significant loss (for instance, a fire), the insured person might have to live elsewhere for months, or even a year or more. Once the coverage limit is reached, there is no additional payment to the insured, so it’s important to ensure, beforehand, that the coverage is adequate.

For Landlords

Additional Living Expenses is also sometimes called Fair Rental Value, and applies to those who rent out their home or a portion of their home to tenants. If the tenant is forced to move out of the rental unit due to an insured claim, Fair Rental Value coverage will pay the rent to the landlord/owner until the tenant is able to move back in.

However, not all policies include this type of coverage, and if that’s the case, and especially if the landlord/owner is paying a mortgage and/or condo fees, there is optional coverage that can be added as Rental Income Protection that should reflect the full annual rental income.

The coverage comes into effect when a claim is accepted and the insured cannot live in their home while repairs are being made.

Do You Have Enough Coverage?

Please review your policy limit for Additional Living Expenses, Fair Rental Value, or Rental Income Protection, and if you feel you are not adequately covered, or simply wish to discuss your coverage, contact your Murrick Group insurance agent.

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