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Does the 5% Debris Removal Additional Coverage in a homeowners policy require that the amount of the 5% be actually spent in order for the entire 5% amount to be owed? The coverage says that if the amount of loss and the debris removal expense exceed the policy limit for coverage A, that there is an additional amount (5%) of insurance for debris removal is available. My position is that if the conditions for the additional amount of insurance to kick in, are met, that the 5% Additional Coverage is then fully compensable as part of the loss, even if the actual cost of the debris removal is less than the 5% additional coverage.

 Kentucky Subscriber

The debris removal coverage is for the extra expense above the policy limit; there must be that expense before the full 5 percent can be applied. Otherwise, the insured would be profiting from his loss, which is not the principle of insurance. The policy states that:

 "If the amount to be paid for the actual damage to the property plus the debris removal expense is more than the limit of liability for the damaged property, an additional 5 percent of that limit is available for such expense." (Emphasis added). Note the last words; the additional 5 percent is for actual expense. If the additional 5 percent is $12,500 but the additional debris removal expense is only $6,000, the insured does not get the full $12,500; he only gets the $6,000 for the actual cost of debris removal. He does not get an extra $6,500 to do what he likes with it.

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