Additional living expense coverage is one of those broad coverages that can bedevil adjusters, agents, and insureds alike. Just what exactly makes a residence unfit to live in?

The phrase is not defined in the policy, which leaves it open to interpretation. An adjuster may have a very different interpretation from the insured of what makes a house unfit to live in. Since there is no definition on the policy, we go to the dictionary. Merriam Webster Online defines fit as “acceptable from a particular point of view, or put into a suitable state.” That's a beginning, although still vague. Let's look at a few situations and see what might cause insureds to relocate.

The obvious situations are easy; a missing roof or wall obviously would require relocation. But what about lack of air conditioning? Remember that fit is defined as acceptable from a particular point of view. If an insured keeps the air conditioning at a chilly 68 degrees, she may be exceedingly uncomfortable with the windows open when the outside temperature is 78 degrees. Another insured who keeps the temperature at 80 degrees may be perfectly fine.

Medical conditions can present another problem. The outside air may be the same temperature as the insured normally keeps the thermostat, but if the insured has allergies, asthma, or other medical conditions, she may need to be in an air-conditioned environment. For that insured, a house without fully functioning air-conditioning service is not fit to live in.

If the kitchen is the only room damaged, the normal assumption is that the family will stay in the house and expenses for meals will be paid. Again, this is the easy version. But what about an exceptionally large family or a household where there are severe dietary restrictions — or both?

In some circumstances it may make more sense to move the family to an efficiency apartment where they can cook their own meals rather than having them stay in the house and eat meals out. There are numerous food allergies and conditions that require avoidance of certain substances. For example, someone who cannot tolerate wheat products may find eating out extremely difficult.

If the house isn't damaged severely enough for the insureds to be relocated but the kitchen and refrigerator are involved in the loss, it still may be necessary to make arrangements. For instance, some medications require refrigeration. It may be necessary to provide a cooler with a constant supply of ice or to rent or purchase a mini refrigerator so the medications can be kept at the proper temperature. If substitute refrigeration is not immediately available, the insureds may have to be relocated even though much of the house is habitable and the insureds are capable of dining out.

Another example might include someone who uses a hot tub daily. Though a person could cope without it for a while if it is used just for pleasure, if it is part of a daily physical therapy regimen, it then becomes necessary to provide the insured alternate accommodations while the hot tub is being repaired, even if the rest of the house is habitable.

There's a fine line between convenient and necessary; few people want or like to be inconvenienced, but life doesn't always go our way. Repairs to the dwelling can be noisy and may create dust as the worksite, but if the house is habitable, there aren't any extenuating circumstances, and most other household functions can be performed, there is no reason to relocate the family.

But what about pets? In general, what makes a home habitable for the insureds makes the home habitable for the pets. While in some circumstances the pets may be able to stay at home while the insureds are relocated, the pets need to be taken care of and often need to be relocated, as well.

Many hotels will not allow animals. If the insureds board their pets, where do they normally board them? There are quite posh doggie and kitty hotels and, if the insured has used such facilities in the past, that's the normal standard of living for the pets. If the insureds normally have the pets stay with relatives or at the Discount Doggie Lodge when they go out of town, then that's where Bowser should go.

The insureds do not get to upgrade their standards of living, and neither should the pets. However, as with their owners, pets with medical conditions may warrant special treatment. It may be necessary to board the animal where either the insured has access to treat the pet, or at a kennel with staff able to dispense medications to the animal.

What's important to remember is that the policy does not define “unfit to live in,” and the coverage provides for additional expenses in order for the insureds to maintain their normal standards of living.

The insured's normal standard of living then becomes the issue. What do they normally eat? Where do they set the thermostat? How do they live on a day-to-day basis? For example, the house is uninhabitable when the insureds' normally have an annual party. The insureds' want extra expenses to pay to have the party at another location. While it may be a significant event for the insureds, it is not a daily living occurrence or expense. The party can be moved to a different date. The coverage is designed to maintain the day-to-day functioning of the household and not the exceptional circumstances that arise.

A balance between extenuating circumstances and common sense is the best way to determine just what makes a house fit to live in. The policy provides very broad coverage for the insured. When determining coverage, the following should be taken into account:

Are there special medical conditions that require a specific environment or special equipment?
Can most activities of daily living be accomplished at the residence?
Is the insured simply inconvenienced, or does staying in the house present hazards that the insured normally would not be exposed to?

The answers to these questions are what should be considered when determining when insureds should or should not be relocated.

Christine G. Barlow, CPCU, is an assistant editor with Fire, Casualty, & Surety. She may be reached at cbarlow@nuco.com.

Special Reports /

What Makes a Residence Unfit to Live in?

Related Stories

Recommended For You