We are representing a client that had a total loss fire. Her policy has a 12-month time limit for ALE coverage instead of a dollar limit. She is renting a home through the insurance company's vendor. The 12-month time limit ran out October 23rd. The insurance company prorated the final ALE payment, leaving a balance owed by the insured for the remaining days in October. The landlord and lease would not allow for prorated rent for the month of October. Our position is that because the lease did not offer an option for prorated rent and the full month of October was incurred on October 1st, which was still within the 12-month policy time limit, the insurance company owes for the full October rent. What is your position?

 Michigan Subscriber

Don't look at it as 12-months; look at it as 365 days. The carrier paid for the ALE for the 365 days from the date of loss which ended on 10/23; the carrier is correct in prorating the final payment. The insured owes the difference; if the landlord won't accept a partial check from the carrier, the carrier can pay the insured and the insured can add the remaining 8 days and pay the landlord directly.