We are representing a client that had a total fire loss. Her policy has a twelve-month time limit for additional living expense (ALE) coverage instead of a dollar limit. She is renting a home through the insurance company's vendor. The twelve-month time limit ran out October 23. 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 1, which was still within the twelve-month policy time limit, the insurance company owes for the full October rent. What is your position?

Kentucky Subscriber

Do not look at it as twelve 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 October 23; the carrier is correct in prorating the final payment. The insured owes the difference; if the landlord will not accept a partial check from the carrier, the carrier can pay the insured, and the insured can add the remaining eight days and pay the landlord directly.