When Does a Home Become Uninhabitable and Trigger ALE Coverage?

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

When your home is seriously damaged by a wind storm, fire or other force of nature, you might end up being displaced from your residence.  Although the repairs associated with many insurance claims occur while homeowners remain in their homes, this may not be a safe or feasible option.  If your home is a total loss, or the kitchen and/or bathrooms are unusable, the only viable option might be to relocate on a temporary basis. 

Homeowners who are forced from their residence will be exposed to living expenses that would not have been incurred without the event causing the loss.  These extra living costs can impose a substantial financial burden because homeowners will be “doubling up” on certain expenses, such as housing in the form of both mortgage payments and motel/hotel bills.  These expenses also include such items as the increased cost of dining out if your normal practice is to prepare meals at home.  This type of insurance company benefit referred to as “additional living expenses” (“ALE”) are not automatic in every case where an insured suffers a loss caused by a covered peril.

The standard for ALE coverage to be triggered is that the home must be rendered “uninhabitable.”  This term is not necessarily as straightforward as you might assume.  Even if an insured could elect to continue residing in his or her residence, this does not mean that the home is habitable under the terms of a homeowners policy.  While the basic definition of “uninhabitable” is “not fit to live in,” the standard for making this determination typically is based on state, county and/or city code standards.  As a general rule, almost every locality requires that the occupants’ basic needs be met.  When such fundamental services as water, electricity, heat or plumbing are unavailable, these deficiencies will usually constitute a basis for determining that the residence is uninhabitable.

The part of the house that is damaged by a covered peril also determines whether a loss makes your home unlivable.  If your kitchen is gutted, for example, this would likely trigger ALE coverage provided your family regularly uses the kitchen to prepare meals.  A family that almost always goes out to eat would not necessarily be entitled to ALE compensation for damage to the kitchen of their home.  When the only bathroom in a home is flooded and unusable, this type of loss also would generally justify ALE payments following a loss.  Similarly, the loss of the master bedroom in a two bedroom home also would likely make the home uninhabitable, especially if the other bedroom belongs to another member of the household such as a child.

While the above examples might seem fairly obvious, the situation can be much more complicated.  For instance, if a bedroom that is unused is damaged, this may or may not trigger ALE benefits in the eyes of the insurance company.  However, special attention should be paid to the impact of repair issues in this type of situation.  The enormous noise generated by equipment used to dry water might justify relocation even if the water damage is limited to an unused bedroom.  Similarly, repairs of the water damage to the spare bedroom might require turning the plumbing off which also might be considered to make the home unlivable.

Because the “normal” standard of living of a family is used to determine if the homeowner is entitled to ALE benefits, the individual circumstances of a family’s daily lifestyle may become relevant.  If a family almost always dines out, the decimation of the kitchen might not render the home uninhabitable.  The bottom line is that many insurance issues can turn on subtle factual distinctions.  As a former claims adjuster and Florida property damage claims attorney, my law office can provide legal advice and represent your interests if your insurance carrier is not processing or paying your claim in a timely manner.

If your insurance company is using sharp practices or otherwise fails to process and pay your claim in a timely manner, you might have a legal claim for financial compensation.  My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM. 

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