Home and fire insurance & additional living expense cover

Have you ever heard stories of people suddenly becoming homeless after a disaster that struck their home? It might have happened due to fire or a hurricane or other perils that damaged the apartment and made it uninhabitable and left entire families on the streets. For all those who own or rent a house, and of course, have a home and fire insurance plan in place, making sure that their policy also includes additional living expenses cover, also called the loss of use coverage, is useful in a situation where your place is uninhabitable.

Additional living expense covers not only the cost of your new temporary accommodation like a hotel but also any additional living expenses such as for food, clothes etc, while your house is being fixed. The idea of additional living expense cover is to maintain the standard of living you had before the damage of your property.

What kind of damages are covered in a home and fire insurance?

In order to be eligible for claims from additional living expenses (ALE) cover, your house, apartment or rented house must have home insurance first since the ALE cover, as the name suggests, is additional coverage.

Damages resulting from a fire, burglary, and burst water pipes are commonly covered in a home and fire insurance plans. As such, any claims for repair costs will be considered under home and fire policy. However, it’s important to note that not all policies are equal, and before purchasing, we recommend you check the exact range of your policy, as certain “extra perils” such as windstorms, floods, explosions, falling objects (inc. airplanes), are usually added to the policy on demand of the client.

What conditions will trigger this ALE coverage?

There are two main events and situations in which you can use benefits under the additional living expenses coverage, and these are:

1. Your home is damaged to the extent that it becomes uninhabitable (unfit to live in) as a result of an insured peril, such as damage caused by fire, windstorm, or lightning. This part can be tricky, as different insurers might interpret uninhabitable in their own way, except for obvious damages. However usually if a place has no running water, electricity, and heating.
   

2. You are ordered to evacuate your home by a civil or governmental authority, such as the fire department, the police, or a disaster response team. This part is also a bit tricky, as you can only claim ALE benefits if actual damage happen.  An evacuation in anticipation of a disaster that doesn't materialize won't entitle you to make an insurance claim.

What expense will be covered under the additional living expense cover?

Your insurer will ask you to complete a normal living expenses table or sheet to establish your normal living expenses. ALE covers any additional living expenses, meaning any necessary expense that exceeds what you normally spend, such as:

• Temporary housing, usually a hotel, or a motel;
• Meals or food preparation items, where the costs exceed the amount you would normally pay if you were living in your home. For example, because you now live in a hotel you must eat out every day, so your meal expenses are higher than normal;
• Moving and temporary storage costs for household or personal items;
• Laundry and dry cleaning expenses;
• Pet boarding, if your pets have to stay in a pet hotel while you're in a hotel;
• Parking fees or additional mileage costs getting to work, or family activities;
• And others.

This is not an exclusive list, and items may vary from policy to policy. What you can expect from each insurer, however, is an assessment from their claims department, which will compare the costs you're claiming to the normally expected costs of your lifestyle.

What are the limits of your additional living expenses cover?

Most standard additional living expense coverage will pay or reimburse you for any additional living expenses you bear for the time that it takes to repair or rebuild your house or apartment. Hence, most of these policies place a time limit to the use of ALE benefits and cap the amount to usually 20% of the total sum insured.

Got questions? Kwiksure’s team is here to help

Whether it's a matter of home and fire insurance, motor insurance or even a golf one , expert advisors from Kwiksure are here to help you. With over 19 years of experience and presence in the city, as well as strong relationships with global and local insurers, we offer free impartial advice, compare plans, provide fast quotations and further help with claims processes. Contact us today to get started!