May 10, 2011

Would loss of use coverage apply to the following scenario?

The insured premises become “not fit to live in” due to a foul odor emanating from an adjacent apartment, caused by renovation work being done in the adjacent apartment.

 Kentucky Subscriber

Additional living expenses apply when a loss covered under section I of the policy makes the premises not fit to live in. Section I provides coverage for direct physical loss to the property in coverages A and B. In order for coverage to apply, there must be damage to the covered property. While there is no exclusion for odors coming from a neighboring residence, I'm not sure most odors are going to be considered direct physical damage. The smell of cooking cabbage is to many very unpleasant yet it's not a direct physical loss to the property. If however the odor from the neighboring premises is chemical in nature and permeates the residence so that the walls etc. must be treated to remove the odor, versus simply opening the windows for a few hours, then ALE may apply.