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Let’s talk about addition living expenses or loss of use coverage and how it affects you in a claim.
“Additional Living Expenses.” This is where most people find they are underinsured.
It pays for all the extra expenses you incur when you cannot live in your condo, townhouse, or home due to a claim. Maybe a fire or water damage.
For example, a fire destroys your home, and it takes over a year to rebuild before you can move back into your home.
You will still be required to make mortgage payments, in addition to paying rent throughout that time.
The additional living expense would pay for the extra rent you would be paying, to live elsewhere while your home was being repaired or rebuilt.
Often you will find with condos and townhouses you have not enough coverage. Let’s say you have only $24,000 in additional living expense coverage on your policy Rent in your area is $3000 per month you are out of your home for 18 months that equals $54,000 As you can see you are coming up short.
Even though this is an extreme example, it can help you understand your exposure.
Make sure you have enough coverage by reviewing it with your broker. Give your questions the attention they deserve. Coverage for additional living expenditures or loss of use is crucial.