Most of homeowners are aware that property insurance helps to protect the investment of what is often our most valuable asset. If you have a mortgage, the bank usually insists that you carry property insurance as it protects them, too. Homeowner’s insurance can also protect from liability in those instances when a third party is hurt on our property. But what happens if your home becomes so damaged that you can no longer live in it for a while?
When your Mexican home is seriously damaged by storms, flooding, fire, or a natural disaster, far more than your financial investment is at risk. If your home is no longer habitable, you’ll need to evacuate while repair works are undertaken, and your family may become suddenly homeless and likely you’ll be seeking temporary housing at a hotel or other fixed-term rental. And given the amount of time it may take to complete repairs to your home, the out-of-pocket expenses can quickly add-up.
However, if you have planned well and are protected by a “loss of use” provision in your property insurance policy, you will be able to move into rental accommodation while your claim is being adjusted and repairs are being made without incurring living expenses that are higher than your ordinary outgoings. This can help you stay out of debt and return your life-situation to its normal rhythm as soon as practicable.
In addition to paying for temporary housing, you may also be covered for moving expenses and temporary storage of your home furnishings. Policies vary, and the total monetary amount and length of time you are covered for will be determined by the provisions of the coverage you arrange.
Depending on your policy, you may also qualify for help with restaurant bills (beyond what you and your family might spend ordinarily on food): after all, if you can’t cook in your own kitchen, you will still need to eat —typically in restaurants— until you can return home. Your insurer might also provide some immediate help with replacement clothing if yours is damaged or not available.
If you rent your property out and your tenants are affected by the damage to your home, some policies offer a provision to pay you for lost rental income; and tenants might also qualify for property insurance benefits if they have had losses or were forced to move out. Check with the policy you purchase to see what the details are if you rent out your property part-time or full-time.
Note About Partially-Rented Property
Beware that domestic insurance policies usually contain small print that do not insure you or your tenants if during the adjustment procedures it’s discovered that part of your property is rented out while you are living there at the same time (for example: renting-out a room, annex, or bungalow on the same property). For that kind of cover you will need specialist commercial insurance, which is more expensive.
While the likelihood of your property becoming damaged to the point of being uninhabitable is slim, disasters do happen—and not always to ‘somebody else’. An affordable all-risks homeowner’s property insurance policy is the best way to ensure that major damage to your home is going to be repaired, your life can continue as normally as possible in the meantime, and you won’t be financially crippled by the event.
Our insurance partner MexPro remarks that it’s best to think of property insurance premiums as part of the total cost of owning property—as it costs much less get adequately covered than it would be to try to recover from a major loss without insurance.