What is alternative accommodation insurance?

One aspect of home insurance policies that is often overlooked is alternative accommodation cover.

What is alternative accommodation cover?

This is an amount payable by an insurer to cover the cost of renting a temporary home for you and your family (and pets) following a claim that leaves your home uninhabitable.

Fire, flood and escape of water can sadly cause enough damage to prevent you from living comfortably in your own home. A good home insurance policy will cover the cost of renting a temporary home for a set number of years, not merely a value equal to the percentage of the sum insured. A better policy will also include cover for your pets and horses, if you have them. The alternative accommodation cover provided by the higher quality policies will allow for a client to stay in the same familiar area (wherever possible) and near their children’s schools, minimising change in an already stressful situation.

An example of alternative accommodation cover

Your home is insured for £400,000 and there’s a claim which means you can’t live in it.

A basic policy may give you 20% of the buildings sum insured to put towards alternative accommodation, so you’ll have £80,000. If renting a similar property costs £5,000 a month, you’ll have 16 months to source the necessary experts and materials, obtain planning permission and complete repair/rebuild of your home. It may or may not be long enough, but do you want the additional worry?

Compare this to a policy which gives you a guaranteed five years’ alternative accommodation in a similar sized property in the same area.

Ensuring you have enough cover is particularly relevant in London and the south east where the cost of renting a home is proportionately higher.

How can Howden help?

Take a look at your current policy. Is there sufficient cover to allow your family and pets to live in a similar local property?

It is when you need to claim that a budget policy will show its true colours. As per the example above some policies may not give you the cover you need. Those who have such policies may need to move to a different location, to a smaller property in the same location, or fund the rent for a more suitable property from their own pocket.

It can sometimes take months, or even years, to reinstate a property to its pre-claim state, especially in the event of a fire, if the property is listed, or if access is difficult. The right alternative accommodation cover is therefore very important.

At Aston Lark, we are high-value home insurance specialists, and the policies we arrange include a generous provision for alternative accommodation. We can tailor a policy to best suit your needs and ensure that your alternative accommodation, in the event of a claim, is not a caravan in your own back garden!

Insurance advice

To speak to Howden about your insurance, please call 020 8256 4901 or email privateclients@howdeninsurance.co.uk