Loss of Use
Nearly all homeowner policies cover “loss of use” or the costs associated with relocating to alternate housing when the insured property is “uninhabitable” due to a covered event. As one can imagine, the homeowner’s interpretation of “uninhabitable” will likely differ from the insurer’s interpretation. For example, most would agree that a dwelling without air conditioning in August in the Gulf South renders a house uninhabitable, but an insurance company may assert that because the structure is intact, it remains inhabitable albeit with minor inconveniences. Similarly, insurance companies sometimes absurdly insist that a dwelling remains inhabitable though a tree has fallen onto the roof, or there is no running water, electricity, available police protection or other services. Common sense would dictate that a home is unhabitable without electricity, air conditioning, refrigeration or police services, but insurers often invoke one or more of a myriad of vague and ambiguous coverage exclusions in order to deny coverage under such circumstances.
Another common tactic insurers employ when attempting to mitigate “loss of use” claims is to invoke the “civil authority,” “prohibited use” or “mandatory evacuation” clauses of a policy. Such clauses provide limited reimbursement of living expenses, typically two weeks, for expenses associated with relocation to temporary housing due to a mandatory evacuation. Sometimes, a dwelling may be uninhabitable due to other issues, such as a hole in the roof, a fallen tree, broken windows, or wall collapse, yet the insurer invokes the evacuation clauses simply because a governmental authority recommended that all citizens of a particular area evacuate.
After Hurricanes Katrina, Gustav, Isaac and Ida devasted New Orleans and much of the surrounding Gulf Coast, the Hurricane Legal Group represented numerous homeowners and small businesses whose claims were arbitrarily denied or undervalued. By aggressively challenging insurance companies, the Hurricane Legal Group was able to secure additional recovery in most cases well above the amount initially offered to unrepresented insureds.