The insured was in the final stages of completing construction on a new home and the insurer knew it was under construction when issuing the policy. They were less than two weeks away from moving in when the house was completely destroyed by fire. They now must find a temporary house until they rebuild the destroyed home. At the time of the fire the house was insured under an HO 00 03 10 00 policy. The insurance company has taken the position that even though the insured purchased ALE coverage, the coverage would not apply to this claim. The basis for refusing to pay ALE is that the policy states “If a loss covered under Section I makes that part of the residence premises where you reside not fit to live in . . .” While acknowledging liability for other coverages, the carrier has taken the position that since the insured had not yet moved in they did not “reside” at the residence premises and are thus not entitled to any ALE coverage. We disagree. The home was insured and named in the policy as the “residence premises”, and the policy defines “residence premises” as “where you reside”. The insurance company charged and received a premium for ALE knowing the house was under construction. The insured is seeking reimbursement for ALE expenses during the restoration period commencing from the time the insured would have been in the house had there been no fire. Please give me your opinion.

Indiana Subscriber

You say the insureds were less than two weeks away from moving in; where were they living at the time of the fire? ALE is broad coverage but the insured does have to be displaced. Where had they been living while the house was under construction, and could they have continued to stay there? They were not residing at the new house at the time of the loss, and ALE does not cover future situations. We agree with the carrier, there is no ALE available.