This post explains why your insurance company may start paying you right away for your temporary housing costs or business losses. Your insurer may even save your property from destruction!
Your insurance company may pay you an advance. After recent California fires, insurers have paid advances to cover temporary housing expenses of at least $500 right after the fire and $1,500 in the week after the fire started.
Your insurance company may pay you “Civil Authority” benefits. This pays if you’ve been displaced because the fire is threatening your property. Civil Authority insurance provisions usually look something like these:
3. Civil Authority Prohibits Use
If a civil authority prevents you from use of the “residence premises” as a result of direct damage to neighboring premises by a Peril Insured Against, we cover the loss as provided in 1. Additional Living Expenses and 2. Fair Rental Value above for no more than two weeks.
Civil Authority. We will pay for the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises due to direct physical loss of or damage to property, other than at the described premises, caused by or resulting from any Covered Cause of Loss.
The requirements for coverage under this provision are:
1. The existence of an order of civil authority which:
A. Prohibits access to the insured premises;
B. Is caused by or results from physical damage to property, other than insured property; and
C. That damage to property must be due to a peril covered under the policy; and
2. That denial of access must be the proximate cause of a loss of business income.
Your insurance company may know if your property has been destroyed. Your insurance carrier could know if your home or business is gone even if you do not. The insurer may have access to advanced satellite imagery. If that is the case, you can start claiming Loss of Use benefits right away, which pays temporary living costs or losses of business income.
Your insurance company might save your property. Some insurers will actually send resources to insured properties to prevent losses. This includes sending water trucks and spraying homes with fire retardants. Let your insurer know that your home or business is at risk!