I live in Portland Oregon and recently my apartment building shut off the water for 5 days due to a leak. Right now only cold water has been restored. During that time I filled a 5 gallon jug at the supermarket for $2.50 twice, which I had to carry up to my 3rd floor unit. I flushed once a day, took showers at the gym, and cooked frozen meals that didn't require added water. If we look at things I actually have receipts for, I'm looking at a $5 claim for the water I hauled up to my place. A friend told me that I could probably justify $50 a day for increased cost of living and inconvenience to put in the "Estimated Value of Loss" field on my claim.
I know that other people in the building moved to a hotel at this time and will likely claim up $150 a day to be reimbursed. Doesn't a system like this invite abuse? People benefit from spending as much as possible during a period like this.
I would think that you'd be reimbursed based on lost services and duration. For instance 5days/31day * (cost of 1 month of rent) for 5 days of lost services.
Why does rental insurance reimburse for damages rather than a flat payout?
byu/dring157 inInsurance
Posted by dring157
3 Comments
Loss of use coverage is designed to let you stay in a hotel when your apartment isn’t habitable. That is the purpose of the coverage. It is not designed to give you a windfall to compensate for inconvenience.
Next time, call your insurer, find out what they will cover, and get the hotel they offer you, or don’t bother making a claim.
You will not get $50 a day because it was inconvenient, insurance will only cover the financial losses.
Your apartment could potentially be liable for something, if they didn’t render you services promised in your lease.
Loss of use is for *additional* living expenses ($5). Or if you had to get a hotel, or buy clothing due to a total loss of your stuff, etc. I wouldn’t suggest filing a claim for this.
You’re right that it can invite abuse, but that’s *why* it isn’t a flat payout and why insurance wants a detailed breakdown. They aren’t going to pay for steak dinners every night.
However, the caveat here is this may not be a covered insurance loss at which point insurance won’t pay anything.
This would absolutely be something the landlord should be stepping in as a quick google search confirms hot water is required by the landlord in Portland – quick relevant Portland thread: https://www.reddit.com/r/askportland/comments/1adj2xm/how_long_can_my_apartment_be_without_hot_water/. THEY should be the ones providing the hotel and any rent abatement.