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Last Post 09/26/2012 8:49 PM by  Mike Kunze
Fire policy for farmers coverage question loss of use
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annie
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09/18/2012 7:10 PM
    Customer is living in the back house but has a fire policy and has HO policy on the front house where is mother lives. They had a fire loss back house is there any ALE or loss of use for the back house?
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    Leland
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    09/21/2012 5:20 PM
    Some policies say "property" that becomes uninhabitable triggers ALE some might say "part of the property" and some might say "dwelling". This is just off the top of my head, I don't have any policy language examples in front of me. But I know we had a big discussion about this before on CADO. It is my humble opinion that if the policy says "property", the ALE could be triggered by damage to the grounds, as long as that damage is from the covered peril.

    For example, lets say the ALE is triggered by wind damage to "property" and the policy doesn't cover trees, but the insured's trees fall all over the place, blocking the front and rear doors of the dwelling. The trees are certainly "property" and the blocking of the entrance and exit makes the dwelling uninhabitable (at least temporarily).

    But what if the policy says damage to "covered property" triggers ALE? In the tree example, the trees are not "covered property" so it could be argued that ALE is not triggered (assuming there is no direct physical damage to the dwelling).

    So you can see (as always!) we need the policy language.

    Does the policy say ALE triggered by damage to "property", "covered property" or "dwelling" or "part of dwelling" ???

    Please quote the policy language. The ALE language is often in two different places of the policy. Please quote both.

    For the umpteenth time, this site is for adjusters, so don't take it personally if you are not. But if you are, please feel free to take it personally. You can't adjust a policy without reading it. We can't answer the questions without the policy wording. If you want to learn to be an adjuster you need to make the effort. Read it and retype it here. Thanks.



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    CatAdjusterX
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    09/22/2012 4:06 AM

    Of course this may very well differ from state to state, nevertheless it is my understanding that ALE is NOT owed provided the insured has an equitable interest in another home. So if he owns the back house and owns or co-owns said front house, no ALE is owed (provided he is able to move in (temporary) immediately)

    Another quick example, a guy has a house in town and a summer house in the sticks (vacant). The house in town burns down,because he has an additional home, in this example he would not incur ALE except maybe the additional funds necessary for the additional miles added to his daily commute

     

    "A good leader leads..... ..... but a great leader is followed !!" CatAdjusterX@gmail.com
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    ChuckDeaton
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    09/22/2012 9:48 PM
    In any event, strictly applied, Additional Living Expense (ALE) is an incurred coverage, meaning, should the insured not incur cost then no ALE claim.

    And, yes, in the past I estimated the mileage for the insured and the mileage was paid.
    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
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    Leland
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    09/24/2012 3:46 PM
    Here's a excerpt from the Indiana Fair Plan 2002 DP1 form re Fair Rental Value (similar to ALE)

    D. Coverage D - Fair Rental Value
    1. If a loss to property described in Coverage A, B
    or C by a Peril Insured Against under this policy
    makes that part of the Described Location
    rented, to others or held for rental by you unfit
    for its normal use, we cover the fair rental value
    of that part of the Described Location rented to
    others or held for rental by you less any expenses
    that do not continue while that part of
    the Described Location rented or held for rental
    is not fit to live in.

    Now compare a DP1 from another state:

    COVERAGE D – Fair Rental Value
    If a loss to a property described in Coverage
    A, B or C by a Peril Insured Against under this
    policy makes that part of the Described
    Location rented to others, held for rental or
    occupied by you unfit for its normal use, we
    cover its:
    Fair Rental Value, meaning the fair rental
    value of that part of the Described Location
    rented to others, held for rental or occupied
    by you less any expenses that do not continue
    while that part of the Described
    Location rented, held for rental or occupied
    by you is not fit to live in.


    Notice the small but very important difference?

    I think the Indiana form is for a Landlord's version of a DP1. The other form adds the words "occupied by you" (the insured).

    So one of the DP1 forms does not cover fair rental value when the insured can't live there and the other policy does.

    (Fair rental value is different from ALE- it usually does not have to be "incurred" and no expense receipts need to be turned in. Its paid based on a formula found in another part of the policy)

    So notice how to different versions of the same form have small changes in the wording that can affect coverage.

    HO3s are the same way. So many different versions.
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    Leland
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    09/26/2012 5:57 PM
    I like to get these claim questions and try to figure them out but it's not that fun when the questioner never gives the policy language. It happens over and over so the question gets asked but nobody can really give a good answer.
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    Mike Kunze
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    09/26/2012 8:49 PM
    Ma, might'n I come stay wit ya for a spell while we commence ta fixin' up the cabin?
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