| Misunderstood Personal Lines Issues (Part 1) | ||
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Additional living expense The questions Let's look at the policy... Coverage D - Loss of Use The limit of liability for Coverage D is the total limit for all the coverages that follow. 1. If a loss covered under this Section makes that part of the "residence premises" where you reside not fit to live in, we cover, at your choice, either of the following. However, if the "residence premises" is not your principal place of residence, we will not provide the option under paragraph b. below. a. Additional Living Expense, meaning any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living; or b. Fair Rental Value, meaning the fair rental value of that part of the "residence premises" where you reside less any expenses that do not continue while the premises is not fit to live in. Payment under a. or b. will be for the shortest time required to repair or replace the damage or, if you permanently relocate, the shortest time required for your household to settle elsewhere. 2. If a loss covered under this Section makes that part of the "residence premises" rented to others or held for rental by you not fit to live in, we cover the: Fair Rental Value, meaning the fair rental value of that part of the "residence premises" rented to others or held for rental by you less any expenses that do not continue while the premises is not fit to live in. Payment will be for the shortest time required to repair or replace that part of the premises rented or held for rental. If a civil authority prohibits you from use of the "residence premises" as a result of direct damage to neighboring premises by a Peril Insured Against in this policy, we cover the Additional Living Expense or Fair Rental Value loss as provided under l. and 2. above for no more than two weeks. The answers What does it do? Additional living expense allows you to move your family and maintain a NORMAL standard of living while the home is being made habitable again. How much do I have and for how long? You have the Coverage D limit on the policy without specific time limitations. Some policies have time limits without policy limits, but in all cases the coverage runs out when the home is habitable again or policy limits/time runs out. Does my family of five have to live in a two-bedroom apartment? The policy states that the insured is entitled to a "normal" standard of living. This is different for each family in each case. One may be entitled to a leased five-bedroom home while another may be entitled to a one-bedroom apartment. |
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| Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course. |
