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Here is what additional living expense coverage can and can't do for you in a time of crisis.
Hotel Costs
If your home becomes uninhabitable due to a crisis or natural disaster, you may have very little notice. This translates to virtually no time to figure out where you and your family will stay until your home is rebuilt or repaired. If you don't have family or friends that are able to let you to stay with them, you will probably end up staying in a hotel. Additional living expense coverage will cover the cost of your stay, with the caveat that you will likely have a maximum amount of coverage. For instance, your policy may only cover the equivalent of 20 percent of your total policy value.
Rental Car
If you lose your car as a part of the damage to your home, additional home coverage can also help cover the cost of your rental car fees. Again, there will be a limit to the amount your policy will pay out, but this coverage will serve as a helpful supplement to any rental car coverage that your car insurance policy offers. Many car insurance policies will cover the cost of a rental car for about one month in the event that your car is in an accident or becomes inoperable.
Other Expenses
Each home insurance policy will vary in regards to what is considered a valid claim for additional living expenses. Some of the other burdens that may be covered include restaurant costs and gas money. You may even be granted funds to help you manage an increased commute from work to home, and money to help you move from your temporary housing back to your primary residence once all repairs are complete. Always read the fine print of your policy before a disaster occurs, so you will have an idea of which costs you'll be allowed to file claims for if disaster strikes.
Special Circumstances
Some disasters are not covered by your general home insurance policy, and therefore your additional living expenses coverage will not apply. For instance, flooding disasters require their own specific insurance. If you don't have flood insurance as a supplement to your regular policy, don't expect to see any of your hotel or restaurant bills reimbursed by your insurance. The good news is that companies often offer a discount to members who purchase more than one policy. For this reason, you should consider purchasing all of your coverage through the same insurance company.
Without additional living expenses coverage, your family will be left
to its own devices when it comes paying for all of the temporary costs
associated with being displaced. While this coverage will result in an
increase in your monthly premium, if disaster does strike the coverage
can easily pay for itself in a very short amount of time.
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