Home insurance may cover hotel, food tab

A home damaged by superstorm Sandy in Atlantique A home damaged by superstorm Sandy in Atlantique on Fire Island. (Nov. 3, 2012) Photo Credit: Ed Betz

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If your house is unlivable, your homeowner's or renter's insurance policy may entitle you to reimbursement for hotel expenses, short-term rentals and other costs you wouldn't have incurred if it weren't for the damage, insurance experts say.

"Generally it's going to be for a similar house," says Jeanne Salvatore, senior vice president for public affairs for the Insurance Information Institute, a New York City-based nonprofit communications organization. Sometimes, insurance companies will provide the housing options themselves. In general, the expenses you are entitled to claim might be limited to 20 percent of the amount of the insurance on the home, she says.

State Farm Insurance provides additional living expense coverage for the increase in cost policyholders incur to maintain their standard of living for up to 24 months while their homes are being repaired, for instance, says Rachael Risinger, a Long Island-based State Farm public affairs specialist.

What can be reimbursed?

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If you opt to bunk with relatives, reimbursement might include costs such as eating more often in restaurants so you don't overstay your welcome, says Salvatore. Coverage may also include buying replacement clothing and other necessities to get through the crisis, she says.

"This is not your opportunity to check into the finest hotel in your neighborhood and have the most expensive meal," Salvatore says. "We're not talking about a brand-new wardrobe here. We're talking about things to get your life back while your house is being repaired."

Keep receipts and documentation, Salvatore advises. You will still have to pay your regular fixed costs, such as your mortgage bill, out of your own pocket, she says. For additional information, visit iii.org.

Register with FEMA

If your damage is determined to be caused by flooding, your loss would fall under your flood insurance policy, which is a separate insurance policy. Such policies are purchased through a regular insurance agent or broker but offered by the National Flood Insurance Program, which is part of the Federal Emergency Management Program, says William Rukeyser, FEMA spokesman. According to the program's website, additional living expenses aren't covered under the flood insurance policies.

But everyone who suffered damage should register immediately with FEMA by calling 800-621-3362 or visiting disasterassistance.gov, Rukeyser says. "The sooner you register, the sooner a specialist will be able to tell you what you'll be able to qualify for," Rukeyser says. Situations will be evaluated on a case-by-case basis."

People should register a claim even if it appears costs will be covered by homeowner's or renter's insurance, he advises. "You do not yet know what your insurance company is going to tell you," he says. "At this point, you don't know if you are going to take a loss. What we would all hope is that as many people as possible get all their losses covered by insurance."

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