When you file a valid claim, both buildings and contents policies will cover an additional percentage of your sum insured to cover alternative accommodation costs. Buildings coverage usually provides more coverage than contents because the sum insured is typically higher.
If your buildings are insured up to PS200,000 and you have a 20% accommodation allowance in this policy, the Insurers will pay upto PS40,000 for any claims for related costs. To make this coverage valid, however, you must:
- You have been covered for an insured incident (e.g. fire)
- This property is inhabitable for normal living purposes
Uninhabitable = unable to be lived within’
Although each Insurer will define what is uninhabitable differently, the general idea is that they will include:
- Water supply interruptions to property
- All sanitary facilities (washing machines / toilets, etc.) lost
- Winter heating loss
- Substantial structural damage (e.g. walls/roof etc.) can be caused by major fires, floods, impacts etc.
- It is possible that someone living on the property has a medical condition which could be affected by the repairs or damage.
- However, Insurers will not pay for accommodation in the event of loss of cooking facilities.
If you are unable to provide proof of a medical condition, such as dampness or related restoration/work (drying, strip off works, dust, etc.), insurers may allow you to claim alternative accommodation costs if you can show medical evidence, such as a doctor certificate, confirming that you are in a medical condition.
If an alternative accommodation claim is valid the policy will cover similar accommodation up to the financial limit set forth in the policy.
Insurers will consider a variety of factors when deciding on the best settlement option for accommodation. The most important one is how long the accommodation will be needed. This will impact on which type of accommodation will be chosen.
There are many types of accommodation you can consider:
B&B, or Hotel
If the accommodation is required for a short period (days to a few days), then the hotel room cost can easily exceed PS3,000 per month for a double room.
Private Rental or Serviced Apartment
This is a better option if repairs will be longer than 3 months. It is usually more economical (even though a minimum of 6 months is required). Additionally, it provides more space and living arrangements that include cooking facilities.
Staying with family
If you choose this option, your insurer will give you a cash allowance (normally less than a rental price).
Although this isn’t a popular option, it is possible if you need accommodation for a long time or if there are no suitable accommodations in the area. This can happen when large areas of land are damaged, such as floods.
This cash allowance can be used to pay for a hotel or rental property. It allows you to live in the property or take a vacation, even though it is considered habitable.
WHAT DO YOU HAVE RIGHTS TO UNDER THIS COVER
If you have a valid claim for alternative accommodation, the insurers are responsible for paying reasonable costs for accommodation. If you can prove that you have suffered financial loss as a result of the claim, you might be eligible for other things. These items can be easily included in the claim, provided that your policy does NOT specifically exclude them – see your alternative accommodation policy texting.
- Additional food expenses (a common occurrence when you stay in a B&B/Hotel with no cooking facilities) You should not include your usual weekly food expenses – these are additional costs only
- Mail redirection to the temporary adress
- Additional travel costs (if you are forced to move from your usual location)
- Telephone redirection is becoming less important due to the proliferation of mobile phones. However, if you have a need for internet or a landline and the property that you are moving into doesn’t have one, it may be possible to negotiate this.
- If your pet is unable to stay in your other accommodation, you can rehouse them.
- Storage and removal costs if you have to move into a new property or need large quantities of your furniture / belongings moved.
- If you’re staying in a B&B, hotel or guesthouse, laundry costs may apply.
If both your contents and buildings are insured by different Insurers, and you sustain both buildings or contents damage, each insurer is responsible for paying the cost. However, you can try to get only one Insurer to take over and then they will work out the cost sharing.
You can either source your accommodation yourself or rely on Insurers to arrange it for you. This can be especially helpful if you require the accommodation in an urgent situation.
Consider staying with family and friends before you decide to rent a hotel. Also, make sure to check what the Insurers will pay you. This offer may be more appealing to you financially and better suited to your personal circumstances.
In some cases, insurance adjusters/adjusters may be able to use preferred accommodation suppliers, who will, for a fee locate hotels/leased dwellings. If the proposal is reasonable, Policyholders can also contact local estate agents to make inquiries. Once we have received the information, we review it to determine if it is a consistent rental in the area and if it is comparable to Insured’s property.
You may be able to freeze your council taxes if you need to move from your property. This is because it is not payable when the property has been occupied. Make sure to get in touch with them as soon as you can to avoid additional fees. You must reinstate your council tax when you move home.
Once the property is habitable, your insurer will require you to move back home. They will also stop paying any accommodation-related costs. You would be responsible for any costs incurred by Insurers if you make home improvements while the property is being repaired.
A refundable deposit is required if you purchase a rental property. This is usually equivalent to a month’s rent in advance. This is a refundable deposit that you must pay. You are also responsible for maintaining the property during your stay. However, it is more common for insurance companies to pay this if they are informed that you don’t have the financial resources to pay the deposit. The Insurer has a duty of fairness and will likely agree for you to pay the deposit (if the landlord returns the proceeds, however, the proceeds must be returned to the insurance company).