XI. The Insured Always Loses.
The sad part about a catastrophe such as a fire is that it leaves the insured always in a worse position than they were before the fire. In addition to the obvious emotional toll, the time needed to devote to the developing of a claim is substantial and impossible to replace. Additional living expense, usually a maximum of $5,000.00, would provide some immediate cash to replace clothing and living essentials necessary within a few days of the fire. Then comes the issue of where does the insured live? Initially there would be accommodations provided by the insurance company in a hotel that may or may not be adequate for the insured’s needs. Longer term requirements include the renting of a house or other facilities, as well as furniture and household goods necessary to maintain a living during the pendency of the claim. Depending upon the policy, additional living expenses can be for a “reasonable period of time” or a specific limitation of one year or more depending upon the terms of the contract.
Unfortunately, even though the building is no longer livable or serviceable as a business, the ongoing expenses associated with it do not stop. The insured must continue to make the mortgage payments, utility payments, taxes, and insurance on the now destroyed building. This creates a terrible financial burden, particularly in the event of a dwelling fire loss where the insured has to rely on the additional living expense coverage to pay for a house rental or motel payments. Accommodations are particularly difficult if the insured has a family whose small children have been uprooted from their home and their stability and security undercut by the tragedy of the fire; to say nothing of the loss of their prized possessions.
It takes a strong family to deal with the tragedy of a fire and, unfortunately, many families do not survive it.
The statements contained herein are for informational purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.