Why does my policy include additional living expenses?
With an increase in natural disasters, such as flooding, wildfires and hailstorms, it is especially important to understand all aspects of your personal insurance policies.
When reviewing your home, condo or tenant insurance policy, you may notice coverage referred to as additional living expenses – while this coverage is usually standard, it can often be misunderstood or overlooked.
What are additional living expenses?
If your home is damaged by an insured peril and you can no longer stay there, additional living expenses helps cover extra costs for things like accommodation, transportation and food.
Keep in mind that additional living expenses is the additional costs you wouldn’t normally pay for if it weren’t for this unexpected circumstance.
For example, if you are not allowed into your apartment due to a mandatory evacuation notice because of a wildfire, you may have to continue paying rent while covering the cost of accommodation in a hotel elsewhere. Additional living expenses could help pay for the extra expense of a temporary accommodation in this situation.
What is covered by additional living expenses?
Additional living expenses generally covers the additional costs in accommodation, food and transportation paid out of pocket if an insured peril forces you from your home – within reason.
In some situations, it may also cover pet boarding if your temporary living situation does not allow pets. It might also cover storage or laundry fees if you previously had those conveniences and now no longer do.
Remember, what exactly additional living expenses will cover depends on your specific policy. If you don’t have coverage for a risk, for example overland flood insurance, you won’t have coverage for additional living expenses caused by that peril.
Your Rogers Insurance broker can help advise you on your individual additional living expenses coverage.
What is not covered by additional living expenses?
Some examples of what additional living expenses will not cover include:
- Your regular expenses, such as your mortgage or utility bills.
- Restaurant bills if your temporary accommodation is equipped with a kitchen. However, if your accommodation does not have a kitchen, restaurant bills may be covered.
- Extravagant expenses, such as luxury hotels or restaurants.
Additional living expenses coverage is not meant to cover all costs. It is meant to only cover the extra costs for essentials.
Every policy will also have a specific limit for additional living expenses. Once you’ve hit that limit, your insurance won’t cover anymore costs. Make sure you know your additional living expenses limit and budget accordingly.
When would I have to use this coverage?
There are a couple of situations where additional living expenses may be of use.
- If there is a mandatory evacuation order from a civil authority. For example, if you are evacuated due to an out-of-control wildfire.
- If you are not able to stay in your home due to a covered claim. For example, your home is severely damaged by a hailstorm and is not safe to enter until repairs are complete.
A broker can clarify when additional living expenses will be considered.
What do you need when submitting an additional living expense claim?
To make an additional living expenses claim be sure to:
- save all receipts;
- provide proof of your normal expenses;
- keep track of all new expenses; and,
- contact your broker as soon as possible.
Your Rogers Insurance broker can help walk you through what is covered, any additional steps you may need to take and other aspects of your insurance policy.