One part of a homeowner's insurance policy that people don't often think too much about is the portion that covers additional living costs. These are the costs that you incur when you have to live away from your home as it's being repaired or rebuilt after a disaster, for example. It seems so abstract when you arrange for your policy, but you really need to take a close look at it and ensure that you buy enough coverage to keep you sheltered without destroying your finances. This type of coverage usually has daily and weekly restrictions on how much will be covered. That means you can't just buy the minimum.
Inflation and Increases in Rents and Hotel Prices
For one thing, prices go up. Take a look at the last few years to be reminded of how rental prices and hotel room prices have soared and how inflation has hit just about everything necessary for daily life. Even if the inflation rate slows, rentals and hotels are likely to still cost a lot more in the future. If you need to stay at a residential hotel for a few months, you need your coverage to apply to as much of that cost as possible. That means thinking ahead and assuming you'll need more than you might based on current costs. And don't forget your pets. If they can't stay with you, you'll have to board them. This coverage usually does cover boarding costs, but you have to be sure you won't go over any daily or weekly limits on the coverage.
Wherever you end up living during the repair or rebuild phase may not be as close to your current home as you like. Additional transportation costs such as gas or even renting a vehicle would be necessary, too. All of these costs add up; the limits on this coverage are not calculated separately based on category. What you get has to cover your housing, pet boarding, and even transportation issues. Anything above that limit is something that comes out of your own pocket.
Delays in Repairs or Reconstruction
And then there are delays in repairs or reconstruction that could lead you to sign a longer-term rental lease. You'll have deposits to think about as well as any early-release costs if your lease has a clause about legally ending the term early. If your house is ready for occupancy again, you won't want to live in rented accommodation, and the policy may not pay past a certain point if your original residence is livable again.
Speak with your home insurance agent about this coverage and ask about the best way to factor in inflation and other issues. You want your insurance to really help you out, and the best way to do that is to have adequate coverage.
For more info, contact a company like LH Griffith and Company.