Heidi Campana, ALE Housing Solutions National Account Manager, continues our series of posts regarding questions relevant to loss of use claims. Heidi addresses two common scenarios regarding the insured utilizing their policy’s Additional Living Expense (a.l.e.) over opting to receive a Fair Rental Value (FRV) payout.
Note: As a general rule, when a policyholder is requesting payment for Additional Living Expenses, not all requests are covered, and they must meet certain criteria before they get paid. Of course, we suggest comparing our answers to your specific Additional Living Expense policies.
Additional Living Expenses vs. Fair Rental Value
Q. The insured has a family farm. The only suitable rental is 15 miles away to the nearest town. Does insurance pay for mileage to and from the farm?
A. Yes, additional mileage would be a covered additional living expense while being displaced due to a loss. ALE coverage reimburses the insured for the cost of maintaining a comparable standard of living following a covered loss that exceeds the insured’s normal expenses prior to the loss. Since, the insured will be traveling back and forth to tend to their farm, they would incur additional expenses due to additional travel from the temporary residence. I would suggest discussing the additional mileage with your claims adjuster to verify how to document these additional living expenses for accurate reimbursement.
Q. A displaced family goes on a one-week vacation that they planned before the claim. Does insurance cover any of their additional living expenses?
A. Additional living expenses for the week of vacation would usually not be a loss expense since the trip was pre-planned prior to the loss.
However, on occasion I have seen adjusters/insurance carriers make exceptions. The insurance company would be paying for a hotel stay if the family were not going on vacation; so at times they will cover these expenses. Often, the amount that the family will get reimbursed is based on the average hotel rate they would have paid if they were staying in a local hotel. It is best to discuss this unique situation with your adjuster to determine if your insurance carrier would cover any of these expenses.
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