Additional Living Expenses
It is said that time and tide never waits for anyone. You might be living a comfortable life with your family members in your cozy home and thinking that everything is just perfect. But the next thing that you may have to confront is a natural disaster or a fire that jolts your house like a pack of cards. This might sound harsh but this is the truth. There are many anxieties that people have to face when they are confronted with such critical situations. Though there are many worries that will throng you but at least some can be removed by availing the homeowner’s insurance.
Additional living expense is a clause of many homeowners’ insurance policies and is intended to provide the customers some financial relief in case of destruction of their homes and possessions. This clause will provide you many benefits during the rebuilding process of your homes. It might so happen that one fine morning you wake up experiencing tremors in your locality and within a few minutes you find that your house is either partially or completely broken. So what’s next? You have to think of finding a place to reside in while your house is being rebuilt. The rebuilding process might take several months, and till you get a new home you have to pay for the living expenses out of your pocket! If you have a policy with additional living expense clause then these expenses are incurred by the insurance company while you can live your normal life even after a great disaster. This is one major benefit that people with a policy that include additional living expenses will have; they can have a significant portion of their living expenses borne by the insurance company during rebuilding of the property.
Destruction of your home and the household goods also disturbs all plans that you might have chalked out for your future and you have to worry about the immediate living and other subsidiary expenses. Additional living expenses clause in your homeowner’s insurance policy allows you to keep all your future plans intact as you will get quick payment for your claims during the rebuilding process of your home. There are many types of expenses that crop up like the bills of the hotels where you might have to take temporary refuge or the house you have taken on rent. This is a sudden expense for you and all these expenses can be met by taking up a policy that provides for additional living expenses. The costs of food that are quite high in hotels where you might temporarily be living will be met from the money that is paid by the insurance company. If you do not want to reside in hotels/motels and prefer living in the rental apartments, then also you have to pay the electric bills and other associated costs but this will be borne by the additional living expenses clause in your policy.
Though there are huge benefits provided by a policy offering additional living expenses but there are certain limitations for the benefactors too. First of all your house should be inhabitable and there should be significant damage caused to your place of living. After this requirement is met the payment will be made on a fair value basis. While living in the hotels or rented apartments the expenses you incur should be reasonable. Suppose the home you had been living in was a small house and after it breaks down you decide to shift to an expensive house, the insurance company for obvious reasons won’t pay you that high a sum of money. Or if you decide to stay in a luxury rental apartment that has much higher rent than the other rental accommodations in the locality; the insurance company will pay you only the sum of money that you deserve. Evaluation for the claim is done in regards to the property that you have and the allotment of money is done on the basis of this evaluation. The money that will be provided to you will be for the stipulated time period that is required to mend your house in its original state, and not beyond that period.
All said and done the primary thing is that to secure yourself from the sudden expenses that might occur due to the destruction of your place of living you must look for a policy that also include additional living expenses. While purchasing your policy check out and enquire about all the aspects (inclusions and exclusions) in your document so that everything is crystal clear.
|
