Posted On: February 24, 2007, 2:10 pm CST

Posted By: Temblor

Every homeowners policy covers additional living expense. Loss of rental income is covered under a commercial policy for, say, the owner of apartments or retail that is rented out.

Loss of rental income is not covered under a homeowners policy.

I live in S. Fl. and when Wilma hit in '05 I was one of the hundred or so people from our agency that manned the phones (once we had service) to take calls from clients with damage. If their home was uninhabitable, I would explain the additional living expense coverage, and I could hear those nearby doing the same.

It's not up to the agent to "offer" the payment, the insurers offer the payment. In a situation like this it's up to the agent to make sure the client knows he has the coverage - we can access the information via computer - and give a brief explanation.

Re loss of rental income, I know of no commercial client who doesn't know they have that coverage - or business income. It is up to them to present the claim to the insurer, and then justify the numbers they are presenting.

the only time I've heard homeowners down here complaining about claims payments is if they turned out to be seriously underinsured. In a widespread catastrophe, the adjusters are going to do triage - get the maximum number taken care of as quickly as possible. That means if a claim is going to involve a lot of negotiation, appraisals, etc. because of a problem like serious underinsurance, those are going to go to the end of the list.

We have condos here that, 17 months after, still haven't even had their physical damage claims paid because they are so underinsured - many are actually insured for less than half their replacement cost.

I worked on a condo a few years ago (I normally don't touch them - too many problems) at the request of a client that lived there.

They were insured by one of the largest agencies in the country (6th now). 20 some 4 unit buildings plus clubhouse and a few ancillary buildings. I got a plat plan and schedule and drove around, noting each of the buildings. Two were missing from the policy!

They were valued at about 50% of est. replacement cost - I recommended to the Pres. that they get appraisals. he said they had appraisals, but didn't want to increase the values.

I explained coinsurance - he assumed I was just trying to drive the premium up.

I finally walked away from the account.

They still haven't received a nickel from the insurer because they won't/can't accept fifty cents on the $. But, that's all they paid for!

It is up to the agent to explain things like this to the insured, so they understand, legally it is the responsibility of the insured, not the agent or the insurer, to determine and insure the correct values.

If it's not done right, the insurer has no obligation to "offer" payment, either for personal or commercial. And the agent certainly has no obligation (or the funds) to offer payments.