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Additional Living Expenses Explained for Hurricane Michael Storm Damage Policyholders

Additional Living Expenses Explained for Hurricane Michael Storm Damage Policyholders

If your Florida home was severely damaged by Hurricane Michael to the extent that it is uninhabitable to live in, most insurance policies provide a coverage called “Additional Living Expense” or “A.L.E.” if it is a covered loss. Under the Additional Living Expense coverage, you and your family may be entitled to rent another home of the same size, like kind and quality as well as be reimbursed for any extra expenses you incur such as food and temporary lodging.

Please keep in mind however that this coverage is based on what you “incur,” meaning you have to spend the money first before your insurance company will reimburse you. As a result, it is very, very  important to keep detailed records of receipts for all related transactions. One tip we give our clients is to use one credit card so they can easily print a statement out to document their ALE expenses when they submit their insurance claim to the insurance company.

Some insurance companies will put their clients into a temporary housing program, which is usually an apartment setting. It could be half the size of your damaged home. Please keep in mind that you are entitled to maintain the same standard of living you had prior to your loss and it is something we tend to argue on behalf of our clients. Do not be afraid to challenge your insurance carrier on this issue.

With the flooding and wind damage caused by Hurricane Michael, the claims settlement and restoration process is going to take longer than you may think, so be sure you are adequately covered and comfortable in your temporary residence.

As always, the public insurance adjusters at Tutwiler & Associates are here to help with any property insurance related questions you may have. Call our public adjuster office in Panama City, 850-888-8052 or contact a public adjuster to submit a question to one of our insurance claim experts.

Total: 2 Comments
Linda Rockwell
  If the home is a vacation home that is destroyed, are we entitled to ALE? The ALE coverage on the loss statement they sent us says zero But we are going to have to incur multiple airline trips and rental bills in order to set up demolition and then the complete rebuilding of our home. Hope you can help with this information .
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Charles R. Tutwiler
Charles R. Tutwiler  Thank you for the question and just so you know this is a frequent problem for owners of second homes when there is a loss they must attend to. As in all fact issues, it depends on the policy coverage in two ways. First, is there additional living expense (ALE) coverage in the policy and what does the policy language say applies? If you do have coverage for ALE and you rent the house out when you are not using it, read the policy carefully as it may cover loss of rents. If there is coverage, then some insurance carriers may want to see a lease or some other supporting documents that your claim was not just a speculative wish but in fact you had someone lined up possibly with a signed lease or rental contract. The other part of your question may allow for hopefully a more positive result and payment for your expenses managing the loss repairs. Some carriers will pay reasonable expenses of the policyholder provided they are incurred by the insured. Since you are in some respects acting as your own contractor to fix the property, this may be paid under the Building Coverage A which is the line of coverage that insures the actual structure. The rule in insurance is that you cannot profit from your loss, but the things you are detailing involve such items as repair, mitigation efforts, etc. so it is to the insurance company’s advantage that you are making the effort to preserve, protect and prevent further damage. I have seen some carriers pay a minimal dollar amount for your labor, so with a lot of pushing and negotiating you may get these expenses paid back. After all, if you did not do the work a contractor would have to do it and they would charge profit and overhead of 20% or more. Of course, it all depends on the language in your policy. Do not overreach and you may find the carrier will welcome you as a partner to get your insured property back to its pre-loss condition. If they refuse to pay, ask them to send you the actual policy terms that supports their position. Finally, you can always write a letter to the president of the company in a very professional and business-like form, asking for reconsideration. You would be surprised how well this works. Good luck and thank you for your interest in our firm and visiting our the website, Publicadjuster.com.
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