If your rented property is damaged by a named peril and you need alternative accommodation during the period when your rented home is being repaired, your renters insurance will cover your living arrangements including your hotel bills.
When is Hotel Stay Paid for in Renters Insurance?
If your rented home is unsafe or uninhabitable for you to live in due to damage caused by factors that are mentioned as named perils in your renters insurance, your insurance provider will pay for your interim living costs. This comes under the loss-of-use coverage in your insurance policy. It is also known as relocation expenses coverage or additional living expenses coverage.
Besides living expenses, the coverage also pays for:
- Gas for your vehicle and parking lot charges
- Storage of your personal items
- Pet boarding
- Public transport fare.
However, your insurance provider will pay for your temporary living expenses only if the damage to your rented property is caused by a named peril. Standard renters insurance includes the following as the covered perils:
- Theft and vandalism
- Fire, smoke, and explosion
- Windstorms, lightning, and hail
- Damage from hot water systems and appliances
- Leakage or overflow of water
- Freezing of the HVAC (Heating, Ventilation, and Air conditioning) pipes
Also, the duration of your hotel stay and the covered expenses during the period depends on your policy and its coverage limit.
The renters insurance pays for your everyday costs and does not cover luxury expenses. Your insurer may ask for your bank statements to verify your expense estimates at the time of filing a claim. Several insurance providers reimburse your living costs once you provide them with the bills at the end of a week or month. However, if you have an upcoming expense for which you do not have sufficient funds, you must inform your insurer.
Steps to Follow to File a Loss-of-Use Claim with Renters Insurance
For your hotel expenses to be covered by your renters insurance, you must follow the steps mentioned below at the time of filing a loss-of-use claim:
- Inform your insurance provider about the damage to your rented home at the earliest.
- You have to fill out a form specifying your rent, grocery, and commuting costs.
- You need to provide your policy details such as the policy number and the declarations page with your policy information.
- You must also submit an inventory of your personal possessions along with their value and also photographs, documents, or statements from witnesses as proof of damage.
- Providing a contact number makes it easy for the insurer to contact you when required.
Your insurer will assign you a claims adjustor who surveys your damaged home to ascertain whether the damage is caused by a covered peril and also to calculate the estimated payout amount.
If your claim is approved, once you pay the policy deductible, the loss-of-use coverage is activated.
When is Hotel Stay Not Paid for by Renters Insurance?
If the damage to the property is by an unnamed peril, you may have to pay for the expenses on your own. Also, unless your home is genuinely unhabitable and unsafe, your insurance provider will not cover your hotel stay even though it may be inconvenient to live in a home that has been damaged by a named peril.
There are other instances when your insurer may deny you coverage:
- Your hotel bills exceed the coverage limit
The compensation amount depends on your coverage limit. If you buy minimal loss-of-use coverage, it may not fully cover your hotel stay.
- You file a false claim
If your claim is false or you cause intentional damage to your home, your insurer will not cover your expenses once your claims are found to be fraudulent.
Does Renters Insurance Cover a Hotel Stay Caused by Mold?
If the mold infestation in your home is due to a covered peril, your renters insurance may cover a hotel stay. For example, accidental flooding in your home due to a burst pipe may cause mold. In this scenario, you will be covered but if the mold is due to neglect or poor maintenance of your home and is preventable, your insurer will not pay your hotel bills.
Will My Landlord Cover My Hotel Expenses if the Renters Insurance Does Not?
During extensive repair and renovation work done by your landlord in your rented home while you still live there, they may be obliged to provide you with alternative living arrangements such as hotel accommodation.
However, if your temporary evacuation is not caused by your landlord, you will pay the expense if you do not have renters insurance.