Q. If the home is a vacation home that is destroyed, are we entitled to ALE? The ALE coverage on the loss statement they sent us says zero but we are going to have to incur multiple airline trips and rental bills in order to set up demolition and then the complete rebuilding of our home. Hope you can help with this information.

A. Thank you for the question and just so you know this is a frequent problem for owners of second homes when there is a loss they must attend to. 

As in all fact issues, it depends on the policy coverage in two ways. First, is there additional living expense (ALE) coverage in the policy and what does the policy language say applies? If you do have coverage for ALE and you rent the house out when you are not using it, read the policy carefully as it may cover loss of rents. If there is coverage, then some insurance carriers may want to see a lease or some other supporting documents that your claim was not just a speculative wish but in fact you had someone lined up possibly with a signed lease or rental contract.

The other part of your question may allow for hopefully a more positive result and payment for your expenses managing the loss repairs. Some carriers will pay reasonable expenses of the policyholder provided they are incurred by the insured. Since you are in some respects acting as your own contractor to fix the property, this may be paid under the Building Coverage A which is the line of coverage that insures the actual structure.

The rule in insurance is that you cannot profit from your loss, but the things you are detailing involve such items as repair, mitigation efforts, etc. so it is to the insurance company’s advantage that you are making the effort to preserve, protect and prevent further damage. I have seen some carriers pay a minimal dollar amount for your labor, so with a lot of pushing and negotiating you may get these expenses paid back. After all, if you did not do the work a contractor would have to do it and they would charge profit and overhead of 20% or more.

Of course, it all depends on the language in your policy. Do not overreach and you may find the carrier will welcome you as a partner to get your insured property back to its pre-loss condition. If they refuse to pay, ask them to send you the actual policy terms that supports their position. Finally, you can always write a letter to the president of the company in a very professional and business-like form, asking for reconsideration. You would be surprised how well this works. 

Hope this answers your question. If you have questions regarding any property insurance claim related issues please call 866.280.8252 or contact us to submit a question to one of our public adjuster insurance claim experts.