Have you ever read your homeowner insurance policy? The declaration page that summarizes your coverage? The truth is we (myself included) don't have a clue what insurance coverage is real until we have an emergency. My house flooded and it's been more than four weeks with no support for additional living expenses, called loss of use by insurance companies!
The insurance company agrees that extensive repairs are needed. To date, they've said they will cover replacing cabinets, doors, baseboard and a lot more repairs. Here's my bedroom after the flood … waiting for repairs to begin.
Insurance Company Delaying “Loss of Use”
But wait, where am I supposed to live while all the repairs are underway?
The insurance company is silent about their documented coverage for “loss of use”. I provided a rental contract two weeks ago because they wanted to compare costs with other local options. They haven't responded to this request in any manner forcing me to sign the contract without their approval. It's simply not right to expect me to:
- Camp out on the floor at my son's house (see below).
- Spend 8 to 10 hours/day working at the house when it's in disarray with contractors working there.
- Expose myself to mold as I'm already getting headaches (learn more about mold and your health).
When & What Does Loss of Use Cover?
Loss of use (coverage D) is one of six common insurance coverages in a basic homeowner policy (one of five in a renter insurance policy). This coverage is meant to cover the extraordinary expenses you have when you can't stay in your home.
When is your home considered uninhabitable?
- When a fire or flooding requires extensive repairs that make it impossible to remain in your home.
- When mold is found that needs remediation, repairs and treatment to make it safe to inhabit your home.
- When the government declares a mandatory evacuation for the area where you live.
Once you decide to leave your home, what expenses for normal daily living are covered? Be practical and don't assume you can turn your personal emergency into a staycation, especially when you live in the shadow of Disneyland.
Here's the financial analysis I did before finding a rental house near my home. The benefit is less drive to time to meet contractors doing repairs at my house.
- Local hotel costs ranged from$99 to $129/night or roughly$3,500/mo.
- AirBnb rental costs were similar to hotel rates. More important was the fact that renting a house would provide me with a home office along with cooking and laundry facilities.
What types of expenses should be covered. And make sure you save all your receipts to support the additional living expenses you claim.
- Temporary housing costs at a hotel or Airbnb home/condo.
- Costs to move into your temporary housing including utilities, credit check, etc.
- Cost of increased mileage (typically a fixed mileage rate) to work or school for all family members.
- Increased food costs if you find yourself eating out more than usual.
Remember you’ll only get reimbursed if you're unable to live in your house due to something your insurance company agrees is covered by your homeowner insurance policy.