Have you ever considered what cover for alternative accommodation is included in your property insurance policy? If your home or business suffers severe damage, you might need to move elsewhere temporarily, so it’s important to ensure you have the right level of cover. This will save you money in the event of a property insurance repair claim.
What is alternative accommodation cover?
If your property is uninhabitable following severe damage like a fire, storm, subsidence or flood, alternative accommodation cover means you can temporarily be housed elsewhere. As with all insurance, it’s advisable to check what level of cover your policy provides to ensure it’s adequate for your needs.
How is ‘uninhabitable’ defined?
This will depend on what’s in your insurance policy, so do check carefully. In general, most insurers say your home is uninhabitable if you do not have sleeping facilities, water, use of a kitchen, sanitary facilities or heating.
Be aware that what you consider uninhabitable may vary from your insurance company’s definition. Always gain approval from your insurer before you seek alternative accommodation; if they do not agree to cover the costs then you will be liable for all expenses.
If you find yourself potentially needing alternative accommodation, talk to Sarrani for help negotiating with your insurer.
Where can I stay?
Your cover will usually provide you with like-for-like accommodation, so you suffer the least disruption possible. If you live a two-bedroomed flat, you will more than likely temporarily stay in a two-bedroomed flat.
The Financial Ombudsman takes the view that “alternative accommodation should be comparable to the insured property – and should enable the consumer and their family to continue their normal work and leisure pursuits as easily and comfortably as possible.”
However, if the damage to your home is minimal and means you might only need to move out for a short time, your insurer may decide to book you into a hotel instead. If this is the case, check what exactly is included – such as whether it means ‘room-only’, which wouldn’t include breakfast or other meals in the hotel.
Contact your insurer before you arrange any alternative accommodation – it may invalidate your claim if you don’t get their permission. In many cases, they will want to arrange this for you with their preferred suppliers.
Are my belongings and pets included?
As always, what is covered will very much depend on your policy, so check with your provider. You will no doubt need to take some of your belongings with you and you may need to put some in storage. Check that storage costs are covered by your insurer too.
Buildings insurance doesn’t cover damage to contents, however. This is why it’s important to have a contents insurance policy too – and check what level of cover you have for your belongings away from home. See our blog on the difference between buildings and contents insurance for more information.
Whether pets are covered will also vary according to your insurer. Some providers cover the cost of kennels or a cattery, so do ask the question. If you have pets, ensure your policy will cover them when you are buying insurance.
I’m a landlord, can I get alternative accommodation cover for my tenants?
If you are a landlord and your tenancy agreement states that you will provide alternative accommodation in the event that your property becomes uninhabitable, you must ensure that your landlord’s insurance includes it, or you could be liable for the cost yourself.
Can I claim for loss of rent?
Landlord policies usually have alternative accommodation or loss of rent cover but typically won’t pay both. If you are not contractually obliged to provide alternative accommodation and your property becomes uninhabitable, loss of rent insurance should cover income lost.
However, not all policies will cover either of these circumstances, so it is important to confirm with your broker or insurer what cover you have in place and make arrangements for what you think you need.
A simple check list for alternative accommodation cover
- Does my insurance policy cover alternative accommodation? Most policies do – but not all.
- How does it define “uninhabitable”? Make sure the definition tallies with your expectations.
- Does it give me sufficient cover for my needs? Check levels of cover and any limits on the policy. Limits can be low, and costs can be high, so will the cover stretch far enough if you have to move out for days or weeks? Repairs can take longer than estimated, so it’s better to go for a higher level of cover.
- Does it cover my children, my pets and my belongings? Consider all of your family’s needs to ensure you have the right level of cover.
- Does it offer like-for-like or hotel accommodation? Most insurance companies will make the arrangements for you and advise what type of accommodation you’re entitled to. They probably won’t accept you booking yourself into a hotel without having given you permission.
- Landlords – does my insurance include cover for alternative accommodation and loss of rent? Check you have adequate cover for both in your landlord’s insurance.
