Additional living expense coverage is one of those broadcoverages 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 tointerpretation. An adjuster may have a very differentinterpretation from the insured of what makes a house unfit to livein. Since there is no definition on the policy, we go to thedictionary. Merriam Webster Online defines fit as “acceptable froma particular point of view, or put into a suitable state.” That's abeginning, although still vague. Let's look at a few situations andsee what might cause insureds to relocate.

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

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

If the kitchen is the only room damaged, the normal assumptionis that the family will stay in the house and expenses for mealswill be paid. Again, this is the easy version. But what about anexceptionally large family or a household where there are severedietary restrictions — or both?

In some circumstances it may make more sense to move the familyto an efficiency apartment where they can cook their own mealsrather than having them stay in the house and eat meals out. Thereare numerous food allergies and conditions that require avoidanceof certain substances. For example, someone who cannot toleratewheat products may find eating out extremely difficult.

If the house isn't damaged severely enough for the insureds tobe relocated but the kitchen and refrigerator are involved in theloss, it still may be necessary to make arrangements. For instance,some medications require refrigeration. It may be necessary toprovide a cooler with a constant supply of ice or to rent orpurchase a mini refrigerator so the medications can be kept at theproper temperature. If substitute refrigeration is not immediatelyavailable, the insureds may have to be relocated even though muchof the house is habitable and the insureds are capable of diningout.

Another example might include someone who uses a hot tub daily.Though a person could cope without it for a while if it is usedjust for pleasure, if it is part of a daily physical therapyregimen, it then becomes necessary to provide the insured alternateaccommodations while the hot tub is being repaired, even if therest of the house is habitable.

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

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

Many hotels will not allow animals. If the insureds board theirpets, where do they normally board them? There are quite poshdoggie and kitty hotels and, if the insured has used suchfacilities in the past, that's the normal standard of living forthe pets. If the insureds normally have the pets stay withrelatives 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, petswith medical conditions may warrant special treatment. It may benecessary to board the animal where either the insured has accessto treat the pet, or at a kennel with staff able to dispensemedications to the animal.

What's important to remember is that the policy does not define“unfit to live in,” and the coverage provides for additionalexpenses in order for the insureds to maintain their normalstandards 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 dothey live on a day-to-day basis? For example, the house isuninhabitable when the insureds' normally have an annual party. Theinsureds' want extra expenses to pay to have the party at anotherlocation. While it may be a significant event for the insureds, itis not a daily living occurrence or expense. The party can be movedto a different date. The coverage is designed to maintain theday-to-day functioning of the household and not the exceptionalcircumstances that arise.

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

• Are there special medical conditions that require a specificenvironment or special equipment?
• Can most activities of daily living be accomplished at theresidence?
• Is the insured simply inconvenienced, or does staying in thehouse present hazards that the insured normally would not beexposed to?

The answers to these questions are what should be consideredwhen determining when insureds should or should not berelocated.

Christine G. Barlow, CPCU, is an assistant editor with Fire,Casualty, & Surety. She may be reached [email protected].