Burst pipes or kitchen fires can render your home inhabitable, which is where renters insurance comes into play. Most renter’s policies contain displacement coverage to help pay for hotel stays or temporary rentals; however, there may be time or dollar limitations attached to such policies. They also cover extra gas expenses as well as storage units where belongings cannot be taken with you.
Loss of Use:
Loss of use coverage, which is included as standard with renters insurance policies, covers temporary housing expenses and additional costs while your home is being repaired. Similar to additional living expense coverage offered by homeowner policies, loss of use coverage also offers government intervention coverage (also referred to as “prohibited use”), which protects you if the government requires you to vacate due to damage from specific perils that was unavoidable.
Tenants who lose their homes may be entitled to reimbursement of hotel stays, restaurant bills, additional groceries, laundry expenses, and pet boarding fees as a result of moving. It’s essential for tenants to maintain detailed records and receipts so their claims can be properly paid, and keeping copies may come in handy should your insurer request them as part of a review process.
Encouraging tenants to purchase renters insurance can foster positive tenant-landlord relations while relieving some of the stress involved with finding alternative housing if their rental property becomes damaged or destroyed. Tenants with renters insurance also find the process of repairs much smoother and can make temporary accommodations much simpler, but tenants must take great care in selecting a policy tailored specifically to their needs and budget before reading its terms and conditions carefully before making their selection.
Additional Living Expenses:
Additional Living Expenses (ALE), more commonly referred to as “loss of use” coverage, helps pay for temporary accommodations such as hotel rooms or rental homes and related costs associated with displacement. It may also reimburse policyholders for increased meal expenses (for instance, if dining out more frequently is necessary), pet boarding, furniture storage costs, and mileage costs on your car; amounts and duration will differ based on the insurer and individual policy details, so policyholders must review their specific policies for exact details and coverage amounts.
Walker notes that ALE coverage usually applies when forced to relocate due to perils covered by your renters or a homeowners insurance policy, such as storm damage to your roof rendering it inhabitable and making repairs uneconomical. If a comparable alternative home exists at roughly equal costs as your current apartment, your insurer should cover any difference up to its limits and after your deductible has been met.
Your expenses will likely be paid out-of-pocket before filing a claim to have them reimbursed by your insurance provider later. Your insurer will likely require receipts and an accounting of these expenditures in order to confirm they fall within acceptable limits and are related to an insured peril that caused the loss.
Storage Units:
Many renters insurance policies offer temporary housing coverage if you must evacuate due to fire, vandalism, or another covered peril. This coverage pays for hotel bills, restaurant meals, and other expenses while you await the rebuilding of your house or apartment, though specific coverage can differ based on insurance provider and policy type.
If you have possessions stored, your renter’s insurance could help cover their loss as well. While some policies limit off-premises property coverage to only a percentage or exclude certain categories, such as jewelry or firearms, from coverage altogether, others offer separate storage unit policies or additional riders that provide greater coverage of belongings stored offsite.
Lemonade offers storage unit insurance policies that can add thousands to the personal property coverage limits found in standard renters policies in California, Connecticut, Florida, New York, and Virginia. They also cover fire, theft, and vandalism perils similar to their standard policies.
If you store valuables in a storage unit, contact your insurance agent about adding policy or rider to protect them against possible risks. It is also a good idea to consider purchasing different storage units to get an understanding of what protections they provide against various perils—and whether or not you can insure them against specific perils.
Displacement:
Displacement coverage is another compelling reason landlords should encourage tenants to purchase renters insurance. This type of protection can ease both stress and financial strain when something unexpected like fire or storm damage render a property inhabitable, paying temporary housing expenses as well as extra living costs like meal and gas expenses during repairs or reconstruction of your home.
Loss of use coverage is typically added onto standard personal property and liability policies for additional coverage limits and terms. Goodcover’s loss of use policy reimburses additional living expenses up to its policy limit without a deductible, such as hotel bills, food, pet boarding, storage units, and more. It also covers emergency expenses that might otherwise not be covered, such as an unexpected funeral cost or lost work wages, which would otherwise go uninsured under other insurance plans.
No matter the cause of your displacement, receipts are essential to getting reimbursed by insurers and providing an accurate estimation of compensation and reimbursement payments. Be sure to keep receipts for all expenses related to temporary housing rentals if applicable and promptly submit a claim with your insurer.
