The fallout after a disaster that renders your home uninhabitable can make it feel like you’re living in a nightmare. You may be feeling shock, sadness, and desperation once reality begins to set in. Your home might be repairable or you may need to rebuild completely. However, additional living expenses coverage can help bridge the gap between now and restoring normalcy. Learn more about ALE and how to maximize the benefits of your coverage when you need it most.
1. Know Your Policy Limits and Coverage
The time to review your policy is now, not when a disaster enters your timeline. Log on to your insurer’s site or find your policy declarations and start reading. Get familiar with your current coverage, its limits, and any caveats. Some insurers have varying deductibles for certain types of claims, especially those that are more common like roof repair.
Go line-by-line and make notes of any questions you might have for your current insurer. Reach out to your provider for additional details or clarification. If it seems like you might need to expand your coverage, request an updated home insurance quote. Then, compare this quote, coverage limits, and rules to other providers. Shopping around for insurance annually is a smart financial move, even if you don’t end up switching.
Some providers may or may not automatically include certain coverage, like water backup and sump overflow coverage. If you have a lower level, consider if coverage would be to your benefit and add it to your quote. Add coverage for flood or hurricane damage, especially if these are likely in your area.
2. Keep Detailed Records of Expenses
When you’re displaced, the last thing on your mind is keeping track of receipts. However, doing so is essential in getting reimbursed for your expenses. Without proof, insurers cannot process your claims and reimburse you. However, keeping good records doesn’t have to be challenging.
If your computer was destroyed, use a new notebook to track expenses. Stash receipts in an envelope or coupon organizer with labels. Opt for both paper and digital receipts for easy reference and backup copies when making purchases. Keep hotel bills, restaurant receipts, transportation expenses, and even documentation for laundry bills. Everything you spend while displaced should be tracked.
Categorize receipts as you go and keep notes about the purchase reason. Take photos and, if you can, locate images of what you’re replacing. This can help remind you of specific costs if your insurer has questions during the claims process. If you’re reading this before disaster strikes, log your possessions, and their cost, and take a photo for your records. Keep replacement costs reasonable and consistent with your typical expenditures, which we’ll cover in greater detail next.
3. Avoid Taking on Additional Expenses
Just like when you move into a new home, a litany of miscellaneous expenses follow. New cleaning products, condiments, and creature comforts can create major budget creep. Before you hit “submit” on your Amazon cart, consider which expenses are truly necessary.
Create a set of checks and balances that you or anyone with purchasing power should consider before buying something new. Determining if something is useful or necessary is a good first check. Beyond that, it should take some serious consideration before a purchase passes the test. Your ALE coverage is designed to alleviate financial strain during displacement, not to expand your budget. Focus on what’s reasonable and necessary for your basic needs.
Review your policy guidelines closely before making a purchase and then again before requesting reimbursement. Keep costs reasonable and within the range of coverage by choosing accommodations that are similar to your home. Anything extravagant or significantly different from your current home may result in issues during the claims process.
If your home had a movie room and now you’re missing the same creature comforts, get creative instead of extreme. Rearrange your rental’s living room into a cozy space and make the best of your new surroundings while you rebuild. This forced budget compression may surprise you by revealing what expenses are truly necessary and what aren’t.
4. Request Reimbursements in a Timely Fashion
Asking for help can be hard, and some people resist using their insurance coverage for fear of impacting their rates. However, insurance is designed for you to use it during your time of need. Tap into your ALE coverage as soon as you have qualifying expenses instead of waiting until your funds are depleted.
As soon as you’re forced to leave your home, reach out to your insurance provider. They’ll ask you questions and kick off the claims process. Share all the information you have, including documentation you’ve gathered thus far. If you’re missing receipts, ask your provider how you can provide information, especially if they were damaged in the process.
Your insurer will want to get you reimbursed as quickly as possible, but they need complete reimbursement requests. Revisit your policy and required documentation including submission dates, limits, and file types to avoid delays. Be proactive to expedite your reimbursements to preserve your savings and cover your additional living expenses.
Insurance Can Be a Lifeline, Use it When Disaster Strikes
Insurance is an essential expense during good times and it may just be your saving grace during a disaster. When you’re forced to leave your home and everything you’ve come to rely on, ALE coverage is there. Take time to understand your policy and identify potential coverage gaps to fill. With ALE coverage in your portfolio, you’ll have peace of mind and financial support while you rebuild your life.