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What You Should Know About Additional Living Expenses Insurance

Understanding the additional living expenses portion of your home insurance.

Most homeowners are familiar with the dwelling, personal property, and personal liability portions of their homeowners insurance in Plano, Texas.  However, many are less familiar with their additional living expenses coverage.  To ensure that you are familiar with your policy, here’s what you need to know about your additional living expenses coverage.

  • What is additional living expenses coverage?

Additional living expenses coverage is coverage that you can use to pay for your living expenses in the event that your home is temporarily uninhabitable.  For instance, imagine that your home is severely damaged in a fire.  While the dwelling portion of your home insurance will cover the cost of repairing your home, it may not be safe for you and your family to stay in the home while it is undergoing repairs.  Fortunately, the additional living expenses portion of your home policy will cover the cost of living away from your home.  For instance, it can help you cover the cost of staying in a hotel, renting a temporary residence, eating at restaurants, storing your furniture, and so on.

  • How can you access additional living expenses coverage?

There are two major factors that affect whether you can file a claim for additional living expenses coverage; the peril that has damaged your home and whether or not your home is truly uninhabitable.  You can only access your additional living expenses coverage if your home insurance provides coverage for the peril that has damaged your home.  For instance, if a tornado ripped the roof off of your home, then you could file a claim for additional living expenses because standard home policies cover wind damage.  However, if your home was damaged by flood, then you cannot access additional living expenses through your home insurer because homeowners policies exclude coverage for flood damages.

Additionally, your ability to access additional living expenses coverage depends on whether or not your home is actually uninhabitable.   For instance, if a tree crashes through your roof, your home would definitely sustain damage.  However, if your home still has running water, electricity, functioning bathrooms, and so on, then your insurer would not consider your home uninhabitable.  Naturally, they would not approve additional living expenses coverage.  Because every insurer has their own criteria for what makes a home uninhabitable, it can be difficult to know if you can access your additional living expenses coverage.  If your home sustains major damage, then contact your insurance provider as soon as possible.  They will have a claims adjuster come out and determine if your home is truly uninhabitable.

  • Are there limits to additional living expenses coverage?

Like all forms of insurance, your additional living expenses coverage is subject to limits.  Most policies come with a coverage limit that is a percentage of your dwelling coverage.  For instance, standard policies will offer additional living expenses coverage up to 20% of your dwelling coverage.  So, if you have $300,000 of dwelling coverage, then you would have $60,000 of additional living expenses coverage.  Insurers also usually cap your coverage at a certain time limit.  For instance, your insurer might only offer additional living expenses coverage for 12 months.

This is what you need to know about additional living expenses coverage.  Do you have further questions about your homeowners insurance in Plano, Texas?  If so, then contact the experts at Tri-Star Insurance/HUB International.  We are ready to assist you with all your coverage needs today.