I hope you are well. I have an insured whose home was severely damaged by fire- requisite repairs have exhausted the dwelling limit and the carrier has agreed to pay for displacement housing during course of repairs. The fire damaged a pipe that leaked water for sometime until it could be repaired. Due to the leaking pipe, the insured has incurred a notably more expensive water bill; the water bill was submitted for reimbursement under the insured's ALE coverage, as the increased water bill is a utility that, I assert, impacts the insured's "standard of living," and as I believe this expense should be reimbursed under the insured's ALE coverage.
The carrier has denied coverage under the insured's ALE coverage and asserts that an increase in an insured's water bill, due to a damaged pipe, is covered under the insured's dwelling coverage. The carrier has not provided its reasoning, and this is a problem for the insured, as the dwelling limit has been exhausted. I have attached a copy of the insureds' ALE provision- could you please provide your stance on this matter? Thank you.
We see two issues here. First, is that an excess water bill is not an insured's normal standard of living. That's a problem with the system but it's not the insured's normal water usage. Second, many policies actually exclude water and steam. Your policy may be different as your adjuster said it's covered under coverage A. The standard ISO form specifically lists Water and Steam under Property Not Covered for Section I. Check your policy. If that exclusion is absent then it would be covered under Coverage A although that limit is exceeded, but it is not an expense under ALE.