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This is the section of the policy that will help you pay for the additional expenses you incur over and above your typical expenses, when after a covered loss you are forced to move out of your home and reside elsewhere until your home can be repaired or rebuilt. Under a homeowners policy, some companies use a percentage to calculate the dollar amount shown and some show no dollar amount. For the companies that use a percentage, I have seen percentages of 20%, 30% and as high as 50%. Assuming a home is insured for $100,000, the policy may provide $20,000, $30,000 or $50,000 as additional coverage for additional living expenses. For the companies that do not show a dollar limit, what you may find are the words Actual Loss Sustained. However, there may be a time limit. This means that if your home burns down and you have to live elsewhere during the rebuilding process, the amount of coverage although not limited by a specific dollar amount may be limited to a period of 12 or 24 months. Once the time limit is exhausted, even if the home has not been finished being rebuilt, the company will no longer have to pay for your additional living expenses. There are some companies that have unlimited Additional Living Expense Coverage not subject to any dollar maximum or time limit! |
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David Shaffer Mortgage and Insurance Services
