Homeowners Insurance: Additional Living Expenses Coverage

By Compuquotes Team on May 21st, 2008
Homeowners Insurance

When shopping for a homeowners insurance policy, one of the important decisions you'll need to make is whether or not to include additional living expenses coverage. While selecting this type of coverage does add a minimal expense to the cost of your policy premium, it is a good idea to include additional living expenses protection in your homeowners policy.

  • What is Additional Living Expenses Coverage?

If your home is damaged as the result of a covered event, the buildings and structure coverage portion of your homeowners insurance will cover the cost of repairs, less your deductible. What many people fail to consider when purchasing homeowners insurance, however, is that many of the problems that can lead to the need for structure repairs actually render the structure uninhabitable for a period of time.

Some situations requiring homeowners policy repairs might require only minor repairs, but many structural problems with homes require that the structure be completely rebuilt. A home that experiences a bad fire, for example, can be uninhabitable for months, or even years in some cases. The same is true for properties damaged by tornadoes, hurricanes, earthquakes, and other types of natural disasters.

Additional living expenses coverage takes care of your living expenses, above and beyond those you normally have, while your home is being repaired. If your home becomes uninhabitable, you'll still have to make your monthly mortgage payments while the repairs are being completed. You'll also have to find somewhere else to live in the meantime. If you don't have additional living expenses coverage, you'll be in the situation of having to pay your mortgage plus rent on a place to stay while your home is being repaired.

In addition to paying the rent expense for a place to stay while you are out of your home, most additional living expenses policies also pay for the cost of renting furniture and electronics comparable to those you had in the damaged property. This type of coverage also takes care of utility deposits, renters insurance, and other expenses associated with your forced temporary relocation.

  • Why is Additional Living Expenses Coverage Necessary?

No one wants to think that his or her home will ever experience damage severe enough to require living elsewhere while repairs are made. However, such occurrences are not unlikely. Very few people are able to easily afford to support the expenses of continued home ownership and relocation to a temporary property while repairs are being made.

Recovering from an incident that causes serious damage to your home is stressful enough without having to deal with the added strain and expense of struggling to keep a roof over your head. Adding additional living expenses coverage to your homeowners policy is the best way to make sure you will have the money you need to provide yourself and your family with shelter in the event your home experiences devastating damage. This type of protection does not add very much expense to your policy premium, and is certainly invaluable if you ever need to use it.

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