There’s so much that’s harrowing for a homeowner when they face a disaster, whether it be from fire, vandalism, or a natural disaster like a hurricane. They face living through the event. then they must assess their home and belongings, often when they are in a state of disarray.
The fear and frustration of seeing your home damaged can be overwhelming. But when you stop to consider what’s next, that might be when you get really scared or frustrated.
Where will you live? How will you pay for it? Will your insurance company help you with rental homeowners insurance? Does your homeowner’s policy even have short-term rental homeowners insurance on it?
As you face the devastation of your home, the first thing you need is safe and secure housing. Read on to learn more about homeowner’s insurance for rental property and what you need to know.
1. Get the Rental Coverage
The first thing to do even before you’re in desperate need is to check out your homeowner’s policy. Does it provide coverage for a rental if you have damage and need to be displaced? Check to see if your policy uses words like:
- Loss of use
- Additional living expenses
- Fair rental value
- Civil authority prohibits the use
This should tell you that you have some language in your policy that would help with coverage if it’s necessary to be displaced.
2. Determining Unfit Status
Storms like hurricanes can cause all sorts of degrees of damage. Certainly, any house that is falling down or has visual structural damage is uninhabitable for the resident.
It may be a situation where the local authorities have prohibited residents from returning to their homes. Roads might be impassable or electricity and water are not available. You’re required to abide by the orders of local authorities and your insurance company would be too.
3. Disagreements With Your Insurer
Let’s say you’ve submitted a claim for damage to your insurer about your home. You believe your home is uninhabitable at present. Your insurance company disagrees and says you can return. What do you do then?
There is something called the Insurance Services Office (ISO) with insurance company language that prevents them from forcing you to return to a home without appropriate living conditions.
Remember, insurance companies will not only be busy following a major disaster, they are also often resistant to paying money out. Don’t continue to tussle with them knowing it’s likely you won’t get anywhere. Seek the help of an experienced attorney right away.
Sadly, the insurance company is much more likely to pay attention to the attorney and you can get the coverage you deserve and get into a rental. If it’s smoldering hot and you don’t have working water and air conditioning, the insurance company can’t say those are appropriate living conditions.
4. Where Can You Go If Displaced?
You might be wondering what kind of housing the insurance company will cover for you if you need to be out of your home. Much of this depends on the type and extent of damage to your home.
If your home needs a repair that is likely able to be done in a short amount of time, the insurance company will pay for a hotel stay. Be sure to ask what they allow in coverage before moving into a hotel that costs more than they will pay.
If you have more significant damage, you may need a rental unit to live in. This will require more funds and more commitment from the insurance company.
They, of course, are going to push to get you back in your home as quickly as possible. Don’t agree to anything you can’t control like repair timelines. But also be wary of signing long-term leases for temporary housing without knowing for sure the insurance company is committed to covering it.
5. Loss of Use Coverage
Here’s how the coverage for replacement housing usually works with insurance companies. Think about what it normally costs you to live in your home, that would be considering your mortgage or rent.
An insurance company will cover the additional living expenses beyond what it normally costs you to live in your house. This would include all expenses for living. If you’re unable to cook in your own kitchen, for example, they would need to cover food expenses while you’re displaced.
6. Similar Housing
If your home that’s damaged had four bedrooms on a lakefront lot, the insurance company has some obligation to cover what would be similar living conditions. They can’t expect you to be displaced into a studio apartment, for example.
The rental you need to move to should closely approximate the home you can no longer occupy while repairs are completed. Don’t assume it’s okay to live a more lavish lifestyle while the insurance company is paying the bill. Just like you can expect them to cover something reasonably close to your home.
The best thing to do is to find possible temporary housing and get the approval of your insurance adjusters before committing to it.
7. Are There Limits to the Coverage?
Yes, there are limits in coverage. This is where the term covered loss is significant. It has to do with what the insurance company will actually cover and consider a loss.
Most policies don’t automatically cover damage from floodwaters or from hurricanes. If you haven’t added something on your policy to protect you, your insurance company may give you a hard time getting coverage.
Let’s say you live on water and a nearby dam on the water is breached and there’s flooding. If you don’t have flood coverage specifically, the insurance company is going to argue they don’t have to cover you.
Get Rental Homeowners Insurance to Protect Yourself
Rental homeowners insurance is important coverage to have as a part of your policy. Is it possible most people never actually need to use it? Sure, but if you are in a position to need replacement housing this coverage becomes very important.
If you are struggling to get your insurance company to cover what they should be covering, let us help. Contact us today to request a free evaluation of your case. You don’t deserve to have the insurance company not provide you with coverage.