When do policies pay for additional living expenses?

1. What are additional living expenses?

   They are the extra rent, food, and other costs you wouldn’t have if you were still in your home.

   For example, you might need to pay hotel bills, eat out, do laundry, or rent an apartment while your home is being repaired.

2. How much does the company pay?

   Your insurance company will pay you back for the reasonable amount you spend up to your policy’s limit. The limit should be listed on your declarations page. Ask your company if you’re not sure.

   Most policies pay 10-20% of what your house is insured for. If you have 10% and your house is insured for $200,000, you have $20,000 for additional living expenses. Policies usually pay for additional living expenses up to 12 months or whenever you’ve used your 10-20%.

   Watch your expenses to make sure the money will last as long as you’ll be out of your home. If you reach your limit before your home is repaired, you’ll have to pay expenses on your own.

   Save all receipts to show your company.

3. When do policies pay for additional living expenses?

   Policies cover additional living expenses if you can’t stay in your home because it was damaged by an event covered by your policy.

   For example, you need to move out during repairs because a tornado damaged your house, and your home policy covers tornadoes.

   If you left your house because of a power outage – and your home wasn’t damaged – your policy won’t cover additional living expenses.

4. Does my homeowners policy cover wind and floods?

   For floods: Some homeowners policies have flood coverage. If yours does, it might pay for additional living expenses.

   Most policies don’t cover flood damage. People often buy flood insurance through the National Flood Insurance Program (NFIP). NFIP policies don’t pay for additional living expenses.

   For wind: If you don’t live on the Texas coast or Galveston Bay, your policy probably covers wind damage and includes additional living expenses coverage.

   If you live on the coast and have a Texas Windstorm Insurance Association (TWIA) policy, ask if you have the extra coverage for additional living expenses. The coverage is available for your primary residence, not a secondary home.

   Call your agent or company to ask if you have wind or flood coverage in your policy or if you have a NFIP or TWIA policy.

Resources

• Power out, food spoiled? Your insurance might help.
• What is windstorm insurance?
• Do you need flood insurance?
• Do you have enough home insurance?
• Storm recovery tips