Los Angeles is currently home to more than 100,000 people who have been displaced by the wildfires that are still burning. As Travel + Leisure Shares Hotels And Vacation rentals Given the significant reductions in hotel rates for Angelenos who are evacuating or have lost their homes, what is the insurance’s ability to provide coverage for short- or long-term stays?
Additional Living Expenses coverage (AL E) is the key factor in this, as stated by LendingTree insurance specialist Divya Sangameshwar
Sangameshwar stated that insurance companies will not provide a check for hotels and food, but instead offer additional funds to those who have lost their homes. Your AL E is determined by the amount of home insurance you have. The amount of money you will be eligible for if you rebuild your home is known as Dwelling coverage. The AL E should account for approximately 20 to 30% of that. ”
The first thing that needs to happen: the insurance company will calculate how much your home will cost to rebuild. While Zillow reports That the average cost of a home in Los Angeles is currently $948,383, dwelling coverage will likely be much less (because a lot of the home’s sale value is in the land rather than the house itself)
” From what I’ve seen, rebuilding a house in California can cost between $200 and $400 per square foot “Sangameshwar told us
T+L spoke with NerdWallet home expert Holden Lewis, Michael Giusti at InsuranceQuotes. Com, and Sangameshwar — and all three gave the exact same example. If your dwelling coverage is $500,000, and your AL E is 20 percent of that, then you’ll likely have $100,000 to cover living costs. (” This includes rent or a hotel room, but it could also include costs such as boarding a pet, additional transportation needs, storage units, or additional food costs that you wouldn’t have had if you had access to your home “Giusti said.)
If your house takes two years to rebuild, that means you’ll have $50,000 a year, which comes to $961 a week or $137 a day
Of course, this is just one example. The more expensive the home, the more dwelling insurance will be, and therefore, the more AL E money available. On the flip side, AL E insurance money is just for homeowners with iron-clad policies, so someone with an insurance plan that doesn’t have wildfire coverage could get less. And renters without insurance will not have access to insurance like this
It’s also important to consider that many Angelenos will have to pay for living expenses like hotels and vacation rentals up front and then be reimbursed.” Each insurance company has its own way of doing things, but a lot of them will expect you to pay your living expenses, and then submit the receipts for reimbursement “Gusti said. Both Sangameshwar and Lewis agreed
Sangameshwar added that rebuilding homes in L. A. I s” going to take longer than you think. “For those who lost their homes and are going to collect AL E, it will be all about making the money last through a lengthy rebuilding process
” The takeaway for people working in the hotel industry is any kind of discount — long-term or short-term discounts, accepting points, etc. — they offer is going to be helpful to help people stretch their dollars further while their homes are getting rebuilt “Sangameshwar said