We do not cover loss or expense due to cancellation of a lease or agreement.

Parish officials have urged policyholders not to return to particular parishes due to water or low water pressure. We do not have evidence to confirm whether the lack of water is due to a Peril Insured Against under the Policy.

Questions:

1. Does this trigger coverage for civil authority?

2. How is the amount determined? Is it based on reasonable expenses the insured has incurred?

3. Do you have other subscribers who have presented this question in the past and how have they handled?

Louisiana Subscriber

The policy requires that the civil authority prohibits use of the premises "as a result of direct damage to neighboring premises". Evacuation in preparation for damage is not the same thing; damage may or may have occurred, but the evacuations were a preventative measure, and not related to direct damage. Any given insured's neighborhood could have been spared damage from the storm and been fine, there was no way to predict who would or would not sustain damage.

Now posthurricane there is damage; that's a different thing. Authorities are urging people to not go back because of lack of power and water, and there is damage and flooding in a lot of areas. But as you underlined an urge is not an order; so civil authority may not come into play while additional living expenses certainly can. All that's required there is a loss covered under Section I making the premises not fit to live in. Lack of water and power, especially in extreme heat, makes a premises not fit to live in.

But what is the cause of lack of water and power? Here you're going to have to look at the policies individually as the HO 00 03 and DP 00 03 are open perils, but the DP 00 01 and DP 00 02 are basic and broad named perils. The DP 00 01 07 14 requires an additional premium for extended coverage for perils beyond fire, lightning and internal explosion. With that additional premium, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke and volcanic eruption are added. Another premium is needed for vandalism. The DP 0 02 07 14 has the same named perils plus a few more. Both dwelling policies and the DP 00 03 and HO 00 03 then have the exclusion for power failure as follows:

Power Failure means the failure of power or other utility service if the failure takes place off the Described Location. But if the failure of power or other utility service results in a loss, from a Peril Insured Against on the Described Location, we will pay for the loss caused by that Peril Insured Against.

This is where it gets complicated—someone's power could be out because a tree in the backyard fell on the wires to the house which would be covered, or because a tree two miles away took down the central transformer for the neighborhood, and would not be covered unless it resulted in a covered cause of loss, none of which really apply for the DP 00 01 and DP 00 02. But that same person could also have wind damage also making the premises uninhabitable. You're going to have to work through these methodically.

Is the civil authority order related to damage to nearby premises? Evacuations as precautionary measures, urges by authorities to stay away for safety's sake, are not related to damage to nearby premises.

The lack of power may/may not be covered depending on whether the lack of power is related to something at the insured's premises, such as a wind blowing down a tree which happened in many places, or was it trees coming down elsewhere that affected power for the larger area, which isn't covered.

The lack of water could be, and likely is related to the lack of power. Both can make the premises uninhabitable, but they have to be related to a cause of loss. They may or may not be. However, since it was a Cat 4 hurricane, there are likely other covered causes of loss making the premises uninhabitable; I'd be generous to insureds and give them the benefit of the doubt as much as I could.

As far as expenses, coverage is for necessary increase in living expenses to maintain the normal standard of living. So an insured doesn't get to stay in a five-star hotel unless that's his normal standard of living. If the insured has pets and there are no hotels that will allow the insured's pets in, then costs for boarding the pets or a residence that will allow the insured and his pet is reasonable. If the insured has a pool that he uses daily, then temporary housing with access to a pool is reasonable. Reasonable is whatever matches how the insured lives day to day. If the insured uses the pool now and again, then temporary housing with a pool isn't necessary. We have a number of Q&A on additional living expenses:

Additional Living Expense Not Covered for New Standard of Living Additional Living Expense—Moving Expense Calculation of Additional Living Expenses Additional Living Expense—What Is Encompassed? Additional Living Expense—What Is "Fit to Live In"?