Homeowners insurance policies serve two primary functions. These policies protect people from liability if others get hurt at their properties. Premises liability coverage can pay for medical expenses and property damage losses if a visitor falls down the stairs on their way back to their car, for example.
The same policy can also help a homeowner repair or rebuild their home after natural disasters, fires and other emergencies. Homeowners insurance policies can be quite expensive, in part because the cost of rebuilding a home increases based on professional costs and supply estimates.
Those who cannot safely occupy their residences due to major damage may need help covering costs beyond just the repairs or new construction. They may also need help covering their temporary living expenses. Does homeowners insurance usually cover the cost of alternative living arrangements?
Displacement coverage is standard
When reviewing a homeowners insurance policy, there are many types of coverage included in the documents. In addition to coverage for rebuilding the dwelling unit and any detached structures that may have sustained damage as well, the policy typically also includes coverage for housing expenses.
A homeowners insurance policy can pay for the rental cost of a month-to-month apartment or a long-term hotel room. In fact, policies often include coverage for additional living expenses beyond the base expenses of temporary housing itself.
People may need to rent medical equipment. They may need to pay for boarding for their pets. They may even need help paying for takeout because they don’t have access to a full kitchen while staying at a hotel or motel.
In theory, a homeowners insurance policy can cover those expenses up to a specific amount, typically expressed as a percentage of the coverage for rebuilding the property. Unfortunately, those pressured into settling their claims early often end up making concessions that limit how much of their losses they can recoup.
Those facing not just construction expenses but the challenges of temporary displacement often need help reviewing their homeowners insurance policy documents and communicating with insurance professionals during the claims process. Understanding what coverage is available can help people avoid scenarios in which they waive their right to compensation prematurely or limit their financial recovery by settling for less than they deserve.
