Our California home was destroyed in a wildfire and we have decided to purchase a replacement house rather than rebuild. Our insurance company is in the process of issuing us checks for our house and additional structures. They have been paying for our hotel room throughout the claim process. Does the insurance company need to continue to pay for our hotel room while we look for our replacement house?
Trish Kennedy asked 3 months ago 3 Answers
Dear Trish,
You asked this question a long time ago and an expert answer never got published. Our deepest apologies. We have assigned your question to another one of our experts. While we wait for the expert answer, please utilize the resources and information available on our website: http://www.uphelp.org, specifically our Buy vs. Rebuild publication.
Best of luck!
Troy Willis Expert answered 16 hours ago Thank you for your question. Since your home was destroyed in a wildfire and you are opting to purchase a replacement house rather than rebuild, the insurance company’s obligation to continue covering your hotel expenses depends on the specifics of your policy.
Typically, under most homeowners insurance policies, the company provides additional living expenses (ALE) coverage to help with temporary housing costs while you are displaced due to a covered loss. However, ALE coverage generally continues only as long as it takes to either rebuild or replace your home, or until you secure permanent housing.
Given that you are actively searching for a replacement house, it’s important to confirm the exact terms of your policy regarding the duration of ALE coverage. You may want to discuss with your insurance company whether they will continue paying for your hotel room until you find a permanent residence. If necessary, escalate the issue or consult with the claims adjuster manager to ensure that your needs are met during your transition period.
Gregg Clifford Expert answered 15 hours ago Dear Trish,
Under existing California Department of Insurance regulations loss of use coverage is available during the “period of restoration or repair” subject to the policy provisions regarding the period of coverage. ( Typically at least 12 months) During an event that is declared a disaster the State has mandated that period be extended by at least 24 months and the potential for l
more time for certain circumstances. It is important to note that while the time frame is extended it does not increase the monetary limit of that coverage.
In respect to whether the carrier owes while you look for a new home, the simple answer is as long as you can provide documentation that you are actively engaged in looking for a home, the carrier would be very hard pressed to deny coverage. Where people sometimes get into an issue is when they have not been able to provide any evidence they are pursuing looking to replace. Sometimes people just check out due to the severity of wildfires and try to re-engage 6 months or a year later. In those instances, the carrier would be within their right to say the person was not actively looking to repair or replace and could terminate the coverage.
As a last comment, please note the carrier owes you to maintain “your standard of living” not simply pay for a hotel room. You are well within your rights to rent a comparable home and furnish it while you look for a replacement property.
I hope this helps.
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