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Living in a hurricane-prone area can be stressful and dangerous. Natural disasters, such as earthquakes, floods, tornadoes, wildfires, and hurricanes, can cause serious damage to your property and your finances. To mitigate the impact of these events, it’s important to understand the importance of additional living expenses (ALE) coverage and what to do when your property is too damaged to be inside.
Texas and California are two of the states most prone to natural disasters. Texas experiences a wide range of hazards, including earthquakes, floods, tornadoes, wildfires, and hurricanes. California also experiences a variety of disasters, including floods, hurricanes, heat waves, wildfires, mudslides, and earthquakes. Florida has been hit by over 120 natural disasters since 1953, with hurricanes being the primary type of storm.
ALE coverage is included in most property owners’ policies and is intended to cover the reimbursement of expenses associated with living while your house is not habitable. These expenses can include rent, restaurant meals, storage fees, transportation, and replacement clothing. However, it’s important to note that standard property insurance doesn’t cover damage from floods, and therefore does not provide ALE coverage. Additionally, flood insurance policies through the National Flood Insurance Program also do not include ALE coverage.
In this blog, we will delve into the importance of ALE coverage for those living in natural disaster-prone areas. We’ll discuss what expenses qualify for reimbursement, the rules surrounding reimbursement qualification, and the disasters that are included. By having a better understanding of ALE coverage, you can ensure that you have the coverage you need in case of an emergency. So, if you live in a natural disaster-prone area, make sure to invest in ALE coverage for peace of mind and financial security.
What is Alternative Living Expense (ALE) Coverage?
A property owner’s insurance policy can provide peace of mind in times of disaster, but it is crucial to understand all the coverage options included. One type of coverage, Additional Living Expense (ALE), can be especially helpful in the event of a crisis. Imagine, for example, a hurricane has rendered your property uninhabitable, and you need to find temporary housing for a few months while it is repaired. ALE coverage can assist with the extra expenses incurred during this time, such as hotel bills, restaurant meals, and apartment rentals.
But, ALE coverage goes beyond just covering your temporary housing costs. It can also provide coverage for a variety of unexpected expenses, including:
- – Laundry costs if you do not have access to washing facilities at your temporary housing.
- – Credit check fees charged by the management of your temporary rental property.
- – Furniture rental if your temporary housing is unfurnished.
- – Rental fees for items you normally use but are not available in your temporary housing.
- – Storage fees for belongings that cannot be taken with you.
- – Meals incurred during trips for rebuild-related business.
- – Insurance for the contents of your temporary rental property.
- – Moving and displacement costs.
- – Reconnection fees for utility, cable, and telephone services in your rebuilt property.
- – Pet boarding fees.
- – Sewer fees if not available in your temporary housing.
- – Mailing and photocopying expenses related to your claim.
- – Internet, cable, and utility setup fees.
- – Mileage for trips to and from your temporary housing and all locations related to rebuild-related business.
What doesn’t ALE cover?
It is important to note that ALE coverage is not designed to cover the cost of repairing or replacing your property or belongings. Those items should be covered by your property owner’s insurance policy. The dwelling coverage in a property owner’s insurance policy can help pay for the physical damage to your property, while personal property coverage can help cover the cost of damaged belongings. This highlights the importance of regularly reviewing your property owner’s insurance policy to ensure you have the right amount of coverage, including any updates to your property that may increase its value.
It’s crucial to regularly review your property owner’s insurance policy to make sure you have the right amount of coverage. Keep in mind that even small property improvements can add value to your property, which means you may need to adjust your coverage accordingly. To ensure you’re fully protected in the event of a loss, it’s always a good idea to have a clear understanding of what your insurance covers and what it doesn’t.
Understanding What Makes a Property Too Damaged To Be Inside
When it comes to hurricanes, it’s crucial to understand how your insurance company may view the habitability of your property. Unfortunately, you can’t expect them to want to pay out all of your damages and act in good faith. In fact, you might find that insurance companies take way too long to process claims and tend to drag their feet. While there may not be a clear definition of what makes a property uninhabitable, it’s important to know what factors can affect the livability of your house.
Don’t mistake storm damage as an opportunity to replace parts of your property that you didn’t like. However, if your property is destroyed or the bathrooms are severely damaged, it’s easy to see that it will not be habitable for some time while awaiting repairs.
Here are some common reasons that can make a property uninhabitable:
1. Power Outages: A loss of power can render a property uninhabitable because it becomes impossible to maintain a safe temperature, cook food, and access running water.
2. Flooding: After a storm, flooding is the most immediate threat to your property. Water can seep into the foundations of your property and cause significant structural damage, making it unsafe to be in.
3. Roof Damage: High winds and heavy rain can cause severe damage to a property’s roof, making it unsafe for people to be inside. A leaking roof can also cause water damage to the interior of a property.
4. Gas Leaks: Storms can cause gas leaks, which can be hazardous and render a property uninhabitable.
5. Tree Damage: Trees falling during a storm can cause significant damage to a property, making it uninhabitable if the damage is severe enough.
6. Unsafe Electrical Wiring: Storms can damage electrical wiring, making it unsafe for people to be in the property until repairs are made.
7. Mold: Flooding and leaks can lead to mold growth inside a property, making it uninhabitable due to the health risks associated with mold exposure.
Will I be able to live somewhere else if my house is damaged and I have ALE coverage?
Hurricanes, house fires, and other unexpected events can leave you in need of a temporary place to stay. The good news is that your insurance policy may include Additional Living Expenses (ALE) coverage to help cover the costs of temporary housing. However, the coverage is limited by time and/or a monetary amount, so it’s essential to understand your policy’s limits and make the most of your ALE claim.
To start, it’s crucial to establish your baselines. This includes identifying what you typically spend on groceries, utilities, and other household expenses before the loss. This information will help you anticipate what you’ll need to spend to maintain your standard of living in a temporary living situation.
When considering a temporary housing solution, you may want to consider corporate apartments. These can be a convenient and suitable option if you need a long-term solution.
To ensure that you maximize your ALE payment, consider the following tips:
- Document how your temporary living expenses are an increase from your normal expenses.
- Check with the insurance company and obtain written authorization for any special expenses to avoid misunderstandings.
- Provide proof of your everyday expenses. This can be used as a reference point for the insurance company if your receipts are questioned.
- Be ready to provide receipts for all your expenses.
Will Your Insurance Pay Out for Additional Living Expenses?
It’s important to understand what is covered by your insurance policy in the event of a covered loss that makes your property uninhabitable. Most standard property owners’ insurance policies include a provision for Additional Living Expenses (ALE). This coverage can help cover the costs of hotel stays, meals, and other expenses while your property is being repaired or rebuilt.
However, it’s essential to know that ALE coverage has limits and exclusions. To determine if you’re eligible for this coverage, you need to understand the specific terms and conditions of your policy. For example, ALE coverage is only available if the damage to your property is caused by a covered peril, such as a fire or natural disaster. If the damage is caused by a non-covered peril, such as a flood or earthquake, you may not be able to claim ALE.
It’s also important to note that most policies have a time limit for ALE coverage, usually around 12 months, after which you will be responsible for paying for your own living expenses. Additionally, the coverage may only pay for a property that is comparable in value to your own, and you may be responsible for any additional costs if you want to be in a property that is nicer or more expensive than your own.
If you’ve been displaced due to storm damage to your property, don’t hesitate to reach out to Bulldog Adjusters. We’re here to help you handle the hassle of your insurance company and make sure that you get the largest possible settlement. Contact us today to find out more!