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HOME : Just the FAQs Ma'amLiving Expenses After A Major LossMy family was the victim of a house fire recently. Fortunately, no one was injured, but our house has to be repaired, and we will have to live elsewhere for several weeks. I know the insurance will cover the cost of the repairs, but how do we pay for all our extra living expenses in the meantime? No need to get fired
up on that score! Your homeowner's insurance provides you with a safety
net. Any additional living expenses you incur will be covered up to the
maximum amount specified in your policy -- usually 20 per cent of the
total insurance you have on your house. If your house is made
unfit to live in by a peril that you are insured against -- like fire --
your insurance will cover any reasonable increase in living
expenses that you incur while your house is being repaired (or until you
find permanent accommodation, if the damage is irreparable). The idea is
to permit the members of your household to maintain the standard of living
they enjoyed before the fire. For example, your
insurance would cover moving expenses -- both out and in -- as well as any
other extra costs. Perhaps you used to live right on a bus route before
the fire, and now you must use alternative transportation, at a higher
cost, to get to work; perhaps it is more expensive for child care at your
temporary place of residence; perhaps you had laundry facilities before,
and now you have to pay for them; or maybe there aren't any reasonable
cooking facilities, so you have to buy more meals at restaurants -- all
these additional costs would be covered. In order for this
insurance to kick in, two criteria must be met: there must be damage to
the dwelling by a peril that the policy insures against; and the damage
must make the dwelling unfit to be occupied while the repairs are being
made. This coverage is also
available to apartment dwellers, as part of the tenant's insurance
package. The only difference is that the amount of insurance available for
additional living expenses is calculated on the insurance you have on your
contents, rather than on the building. The same holds true for
condominiums. It's important to
remember that your homeowner or tenant policy doesn't just help you
replace what you lost -- it also tides you over in the interim. Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, Contact Us. |
