Alternative accommodation cover and home insurance

What’s alternative accommodation cover?

Alternative accommodation cover is a feature of most building insurance policies. It'll give you somewhere to stay should your house become uninhabitable due to an event like a fire, flood or another emergency.

Alternative accommodation may be included as standard under your policy but in some cases, you may have to add on protection for an extra cost.

Not every policy covers the same amount and you should check your terms and conditions carefully to find out the limits of your cover.

Out of 322 building insurance policies listed on Defaqto, 94% offer alternative accommodation cover of £25,000 or more.

Some policies specified a definite figure while others offered up to 20% of the sum insured on your buildings insurance. That means if you had cover £200,000 total buildings insurance cover with a 20% claim limit, you’d be able to claim up to £40,000 for alternative accommodation.^[2]

Or your insurer might set a time limit instead, for example paying for accommodation for up to two years.

You might even be able to get a limited amount of cover if the damaging event occurs next door and leaves you unable to get into your home.

If you don’t have a working kitchen but would still rather stay in your own property, insurers might reimburse you for the cost of takeaway food and eating out.

You could be covered for accommodation for you, your family and pets (including kennel fees), plus short-term storage for your surviving furniture.

What alternative accommodation will be provided?

Depending on how long you’re likely to be out of your home, you might stay in a hotel as a short-term arrangement, or a privately rented accommodation for longer-term repair work.

According to the Financial Ombudsman, alternative accommodation should be comparable to the insured property, and should allow you and your family to continue your normal lives as easily as possible.

For instance, if you live in a four-bedroom, semi-detached property, you should be re-housed in a four-bedroom, semi-detached property.

Insurers will try to place families in the local area so that their work and education isn’t disrupted.

This might be difficult, for example in a flood when there’s little temporary accommodation nearby.

If you’re forced to live away from your local area and commute to work and/or school, the cost of additional transport should be reimbursed to you by the insurer.

Does my landlord have to provide alternative accommodation?

A landlord is only required to provide alternative accommodation if the tenancy agreement says it must be provided.

If it’s not part of the contract, you won’t have to pay rent if the property becomes uninhabitable.

In this case, landlords can get loss of rent protection as part of a landlord insurance policy to cover any losses.

How to make a claim

1. Call your insurer as soon as you can.
2. Your insurer will send a loss adjuster out to your property to assess your claim - they’ll decide whether your home is inhabitable or not.
3. The loss adjuster will let the insurer know whether you need alternative accommodation and how long your house will be uninhabitable for.
4. Your insurer will then be in touch to let you know what to do next and whether you’ll be able to make a claim or not.