Typical Insurance Coverage Of Secondary Costs
Typical Insurance Coverage Of Secondary Costs
It’s common for customers of ours to get concerned about insurance coverage. There can be a lot of questions that come up, even when the claim is covered. Who pays for things such as increased electricity bills from our equipment running, hotel stays when the bedroom’s flooded and can’t be slept in, and eating out when the kitchen isn’t usable? What about additional mileage on cars because a family’s living further away from their jobs than they used to while they’re home’s being worked on? There’s a lot of additional expenses that often come into play when a household experiences a water loss. This blog post covers talks about typical insurance coverage of secondary costs.
Ultimately, all insurance coverage is up to the adjuster, and nothing is really ever guaranteed since policy determination is up to that unique individual. As you’re running your Delta Restoration Services franchise you will have customers ask you these sorts of questions. The best response is always “please check with your adjuster.” Even if we see certain trends and might want to advise the customer, the best path is always to direct them back to their insurance provider. But it is useful for you to have some expectation of things that are typically covered – and not – just for your own planning.
Maintaining & Restoring Like Kind And Quality
The overall goal of most home insurance (HO-3 policies and those similar) is to both maintain like kind and quality of lifestyle for insured while their home is restored, and to restore their home to like kind and quality to its pre-disaster state. Policies that cover more expensive homes obviously cost the insured more per year to enforce than policies on smaller homes because restoring more expensive homes costs more. Since insureds agree to pay whatever cost is necessary to cover their home, the insurance company is on the hook to deliver.
Once an adjuster agrees to pay for a covered loss we know that we can perform work without worrying about getting paid. It may take us longer to get paid than we’d ideally like, but that’s another story. The other side to a water repair job though is that many homeowners experience a great deal of discomfort in some way or another while their home is being restored. If that discomfort is severe enough to affect them financially or in some other dramatic way, the insurance company may be asked to pay for additional costs or comforts to compensate.
Additional Living Expense (ALE):
Additional costs of living that result from an insurance policyholder leaving their home because of a covered insurance claim. This may also include adding additional necessary costs to maintain an insured’s current quality of living while their home is restored. ALE covers costs such as hotel rooms, eating out, extra gas mileage to and from work, and sometimes even boarding for pets. Many of the following examples are also forms of ALE.
Whenever we’re performing water extraction and water removal for a home, we’re always using top-of-the-line equipment. Air movers and dehumidifiers have come a long way in the last 20 years, but they still eat up a lot of electricity. It’s not cheap for us to plug in all those extra cords. Additional electricity cost is typically covered by insurance since equipment is required for professional dry-out work. The work can’t be performed without the equipment, so the electricity required to power the equipment is covered.
Hotels were already listed above, along with pet boarding. But sometimes if a family is used to living in a large, well-furnished house, and their restoration project is going to take a while (more than a week or two), their insurance company may opt to find them another suitable living space that better matches the pre-disaster state of their current home. Families in this position may end up renting a similar high-end home instead of staying at a hotel. It’s almost preferable for us when a customer does end up leaving their home to live elsewhere while we complete repairs on their home. Many people don’t realize how intrusive drying equipment can be into their daily lives.
Origin Of Loss
Origin of loss is another large topic since it can be vital for determining coverage of some secondary costs. Damage clearly resulting from a covered loss can also be covered by insurance, which applies to a wide range of costs.
Whenever we’re helping someone recover from a water loss at their home, for instance, one of the first items of business for all involved is to determine the origin of the loss. We need to determine where the water originated so that we can fix the leak and keep it from re-flooding. It’s very difficult to dry a property if it continually re-floods from broken pipes or an improper or damaged roof. As you well know, determining origin of loss is a staple for any water job.
Common Secondary Costs Typically Covered By Insurance, Based On Origin Of Loss
Many homes built before 1978 contain asbestos in at least one part of the home. Manufacturing asbestos-containing material is illegal in the United States today, but it is not illegal to construct properties using material that already contains asbestos. It’s a weird work-around. But it means that some homes built after 1978 still contain asbestos. Actually, probably a lot more than you might think. We’ve found homes built as recently as 2015 that contained asbestos.
In most cases, asbestos is not dangerous. However, if we must remove asbestos-containing material in order to dry out water-damaged material, abatement can become necessary to prevent any harm coming to the home’s inhabitants. So long as abatement is required in order to complete dry-out in the home, it is most often covered as a secondary cost.
This is a tricky topic. Most insurance policies nowadays specifically exclude mold coverage. However, if mold growth clearly results from a covered water loss, mold remediation is typically covered as well. If mold growth occurs from a slow leak, however (which are almost never covered by insurance), that is when mold remediation projects are typically not covered.