Extraordinary Expense Coverage
Also known as loss of use/rents coverage, extraordinary expense coverage, reimburses for added expenses incurred when your home becomes uninhabitable due to a covered loss. This coverage includes reimbursement for the costs of hotel/lodging, and/or for the loss of rental income, for up to 6 months. Loss of use coverage can be useful when an insured homeowner has to stay in Mexico to supervise the repair/reconstruction of their home after a covered loss occurs.
For loss of rents coverage, the insured must provide proof of confirmed rental bookings, or a leasing contract, in order to file a claim for lost rental income.
The limits of coverage for extraordinary expense range from as low as $1,000 USD, up to $400,000 USD.
Tips for calculating the amount of extraordinary expense coverage needed.
For an owner-occupied home in Mexico:
- Determine how much it would cost to rent a dwelling in Mexico with the same level of quality as your insured home, for one month.
- Multiply that figure by six.
For those who rent out their homes to others:
- How much do you charge for one month of rent?
- Multiply that amount by six.
It’s also important to consider Mexico’s peak tourism season, when the amounts charged for lodging/rent are typically increased. Due to these fluctuations in the expense, many customers like to add an additional buffer amount when calculating their limit of insurance for extraordinary expense for both owner occupied and rental properties.
No Deductible or Coinsurance
Extraordinary expense coverage is not subject to any deductible or coinsurance.