Thanks for your comment. The default scales with our property coverage (and you can top it up too) ending up at $50k total. What number would you be looking for here?
By way of background, I consult on litigation for a living. I may not be the Farmers guy but I've seen a thing or two when it comes to displacements (evictions, mold, fires/explosions, natural disasters, etc.). Here are some reasons and scenarios explaining why $29K is likely to be woefully inadequate in the areas I mentioned:
1. You're going to eat up a chunk of your ALE coverage in the immediate aftermath of your displacement and will never find permanent relocation immediately.
2. You have to assume that the claims reps on the subro or defense side (or both) are going to fight you on paying out limits.
3. You have to assume that you'll need to retain an attorney. With a standard contingency fee of 30%, your maximum ALE recovery is going to be 70% of your ALE limit, which in Goodcover's case is $20,300.
4. You have to assume that there will not be an entity against which you can pursue an uninsured loss above your limit (for various reasons).
5. You are highly likely face a substantial monthly rent increase, including the loss of financially tangible amenities, when you relocate. Full stop. That increase is likely to be indefinite.
6. Supposing you are lucky-- for example you're in a rent-controlled unit in an area governed by a law which requires the landlord to offer back a unit under your original lease terms upon rehab/rebuild-- you are highly likely to hit your ALE limit anyway for a variety of reasons. A) There might be no rebuild, in which case your rent increase will be indefinite. B) Your landlord might violate the requirement to re-lease under the original terms, in which case your rent increase will be indefinite. C) A rehab/rebuild could easily take 2-3 years (especially in a heavily regulated metro area) if the building damage is extensive, in which case you may well exhaust your coverage before you can move back in.
In the renters insurance market our ALE numbers are pretty normal (or better!), so wanted to get a sense of what you think is needed here.
I live in SF. My personal best case scenario in the event of a permanent relocation (insurer freely pays out limits without me having to hire an attorney, I use none of my ALE coverage in the immediate aftermath of my displacement, I relocate to a rent-controlled apartment with the same amenities), is that if I'm extremely lucky, $100K might last me 4 years before I have to leave SF entirely.
ALE is not meant to permanently replace your apartment. I don't understand why you would be expecting 4 years of living expenses to be covered in the case of your apartment burning down. I wouldn't even expect 4 months. It is meant to help you get back on your feet, and go to a hotel for the immediate aftermath while you look for a new place to stay.
You lost your apartment, not your entire livelihood. Chances are you still have an income to pay rent and a big chunk of contents coverage to help you out with down payments, and honestly, the insurance company should be going after the building owner.
1. ALE time limits are set by the policy unless otherwise defined by statute. In CA, for example, if you are displaced due to a natural disaster, your ALE coverage remains in place by law "for a period of no less than 24 months from the inception of the loss" (CA Insurance Code 2051.5(b)(2))
2. There is no statutory ALE time limit on uninsured losses (at least not in CA). In theory (and in practice), you can make a claim for an indefinite period of time if you can prove you'd more likely than not stay in your apartment forever (I have recently seen one such actual claim in SF for 30 years of ALE, for example).
3. If you live in SF, you should expect 4 years of ALE because it might well take that long to rebuild. The building owner may spend the better part of a year deciding whether or not to rebuild, 3-6 months getting estimates, and 2 years actually rebuilding. This happens all the time.
4. I won't speak for what other people want from their insurance, but the loss I am personally trying to protect against is not the out of pocket cost while I look for a temporary apartment, it's the additional $2K or $3K+ per month that a temporary apartment is going to cost me until I can either find something cheaper, move back into my old unit after a rebuild, or decide to permanently leave the Bay Area. I want to buy myself as much time for that process/decision as possible, because the odds are good I'll need it.
If the underlying issue here is that you're in some sort of rent controlled situation, and market rents in your area are way way higher than what you pay, and you expect the insurance company to pay ALE until you find another rent controlled apartment--sorry. You're not going to find many insurers that will plan on covering that.
A) There's no point in quibbling over what "temporary" or "permanent" means because the definition varies from policy to policy. There is no other source of truth unless it's in a legal statute.
B) With respect to the scenario I'm talking about, you are both factually and legally wrong. Again, I know this because I work on property damage lawsuits for a living. If my rent-controlled apartment is damaged in a fire and I have to temporarily relocate to another more expensive one for 3 years while I wait for mine to be rebuilt, the additional living expense I pay in the form of increased rent during that period is absolutely something ALE is intended to, and does in fact, cover.
Also, since unlike homeowners' the carrier has no way in expediting the rebuilding of the building, I'd be surprised if they are willing to pay for your rent indefinitely until the original building is rebuilt. Perhaps you could win if you took them to court, but it will not be a routine process.
It could be, along with say family size. But the UX cost of asking such questions is real, especially on an insurance application form. People get worried why we want to know such things so early on.
Today we're able to provide a pretty good estimate with no personal details, nothing but a zip code in fact. We might work the zip code into temp housing default at some point, but it's not without issues. Changes to the property <> temp housing link built into our rating require solid data and regulatory approvals.
Don't take this too literally as I'm just a developer, not a licensed insurance agent. But this kind of thing is harder in a heavily regulated business such as ours.