July 13, 2017
(Vancouver, BC): Residents across Canada are being evacuated from their homes because of encroaching wildfires. What happens if you’re forced out of your home?
If you must move out of your home because of an evacuation order, then you will need to spend money on temporary accommodations, restaurant meals, essential items, and other necessary expenses. Essential items include things like medication and toiletries. How will you handle these new expenses? Provided below is some information on what to expect once evacuated from your home. Also provided are examples of what would and wouldn’t be covered under your home insurance policy.
In the event of a mass evacuation, most home insurance policies will protect against increases in living expenses (also referred to as additional living expenses) that result from an evacuation order. The key word here is “increase” as not all living expenses are eligible for reimbursement under home insurance. Only the additional costs that are over and above regular, normal, day to day living expenses are covered under additional living expenses claims.
Most policies define living expenses as accommodations, meals and residential utilities. Policies cover the increase or additional costs associated with these items because of evacuation orders. Ordinary expenses that would have existed independently of evacuation orders, like mortgage payments and property taxes, are not be covered because they remain steady.
Direct Damage: This is when your home is unlivable because of direct physical damage due to an insured peril. In other words, if your home has sustained actual fire or smoke damage that makes it impossible to live in while repairs are made, then you will be able to claim your additional living expenses for the reasonable time that it takes to repair the damages. What is considered “reasonable” will depend on your unique circumstances, and your claims representative will work with you to develop a solution appropriate to your situation.
Whatever the cause of the damage that makes your home unlivable, it must be a covered peril. If something not covered by your policy makes your home unlivable, like mold or rodent infestation, then the resulting additional living expenses will not be covered.
Civil Authority Order: This is when you are not allowed to live in your home because a civil authority has issued an evacuation order because of the threat posed by an insured peril. For example, a wildfire is nearing your neighbourhood and the civil authority has ordered everyone in your neighbourhood to leave. On a more individual example, let’s say that you live in a condo complex and one of your neighbouring units has a fire, the civil authority may not let any other unit owners live in the building until the safety of the building has been restored.
Some policies limit additional living expenses for mass evacuation orders to a set dollar amount, or a specific time period. It’s important that you check your own policy to determine what your specific limit is for civil authority order additional living expenses.
It is also important to note that, once the civil authority lifts the order and gives the all clear, the mass evacuation claim will cease, regardless of how long it takes you to return home, or if you decide to stay away for your own reasons.
It is important to know that, when it comes to being evacuated by a civil authority, an “alert notice” does not qualify for coverage. Civil authorities often put areas on evacuation notice or alert, and you may decide to leave voluntarily, but if the civil authority has not actually issued the order for you to go, the increased costs you incur by voluntarily leaving will likely not be covered. Only officially ordered evacuations are covered for additional living expenses.
There are several reasons why your policy does not include coverage for additional expenses while on alert. First, authorities issue evacuation alerts to give residents enough time to prepare for an evacuation should it be necessary. If residents were to voluntarily leave town prior to a formal evacuation order, then the economic cost to the area would be significant, and very difficult to predict. Second, if the alert does not turn into an evacuation order, then economic losses of this nature would be unnecessary and avoidable. Home insurance is not designed, or priced, to cover expenses of this nature. To do so would require significantly higher premiums across the country.
In the event of an evacuation, your home insurance policy will cover the increase in your normal living expenses. In other words, your policy will cover additional expenses that are considered essential and reasonable. For example:
Accommodations and meals as well as toiletries and medication that you were unable to pack.
Essential clothing if you were unable to pack. Essential clothing would include a couple changes of underwear, socks, pants and tops. Basically, enough clothing to reasonably tie you over until you can return home. Of course, if the evacuation goes much longer than expected, then increased cost to laundry clothes may become eligible.
Some home insurance providers may grant exceptions for reasonable purchases that may not be considered day-to-day but are still necessary. Your claims representative will be able to discuss your unique situation and negotiate such expenses with you. Some examples may include:
During the evacuation, you left your prescription glasses in your home. It’s reasonable to expect your home insurance provider to cover the cost of purchasing a replacement pair. However, your policy probably will not cover the cost of designer sunglasses, which are not a necessary or reasonable purchase.
During the evacuation period, your small child becomes worried and stressed so you purchase a plush toy to comfort them. One plush toy may be a reasonable purchase, so your home insurance provider may reimburse you. However, if you buy six plush toys and two remote control cars, then you may not be reimbursed.
It’s important to remember that in most cases, additional living expense claims will be subject to your policy’s deductible.
A good rule of thumb when wondering whether a purchase would qualify as a reasonable, necessary and essential is to ask yourself: do you absolutely need it, and would you buy it even if you had no insurance? If you’re prepared to buy it even knowing you may not be reimbursed, then do so. Just be sure to keep your receipt and be prepared to answer questions about why it was absolutely needed. The final decision as to whether it will be accepted as a bona fide and reasonable essential purchase will rest with your home insurance provider.
To ensure you’re keeping track of your additional expenses, and to help your claims representative process your claim as swiftly as possible, it’s important that you keep all receipts. Your claims representative will clarify just what you can and cannot claim, and receipts are necessary to calculate your reimbursement. Here are three ways you can organize your receipts:
For assistance with your claim, your first and best point of contact will be your claims adjuster. This professional will be assigned to work directly with you, to quantify your loss, and to prepare the necessary forms so that your claim can be paid.
If you have any questions regarding your policy, then you should call your home insurance provider. Of course, our team at Square One would also be happy to help. We can be reached at 1.855.331.6933.