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0 pointsstaticautomatic6y ago0 comments

Your maximum ALE limit in my zip code is $29K.

By way of background, I consult on litigation for a living. I may not be the Farmers guy but I've seen a thing or two when it comes to displacements (evictions, mold, fires/explosions, natural disasters, etc.). Here are some reasons and scenarios explaining why $29K is likely to be woefully inadequate in the areas I mentioned:

1. You're going to eat up a chunk of your ALE coverage in the immediate aftermath of your displacement and will never find permanent relocation immediately.

2. You have to assume that the claims reps on the subro or defense side (or both) are going to fight you on paying out limits.

3. You have to assume that you'll need to retain an attorney. With a standard contingency fee of 30%, your maximum ALE recovery is going to be 70% of your ALE limit, which in Goodcover's case is $20,300.

4. You have to assume that there will not be an entity against which you can pursue an uninsured loss above your limit (for various reasons).

5. You are highly likely face a substantial monthly rent increase, including the loss of financially tangible amenities, when you relocate. Full stop. That increase is likely to be indefinite.

6. Supposing you are lucky-- for example you're in a rent-controlled unit in an area governed by a law which requires the landlord to offer back a unit under your original lease terms upon rehab/rebuild-- you are highly likely to hit your ALE limit anyway for a variety of reasons. A) There might be no rebuild, in which case your rent increase will be indefinite. B) Your landlord might violate the requirement to re-lease under the original terms, in which case your rent increase will be indefinite. C) A rehab/rebuild could easily take 2-3 years (especially in a heavily regulated metro area) if the building damage is extensive, in which case you may well exhaust your coverage before you can move back in.

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chrisplotz6y ago· 2 in thread

All regions go to $50k if you up the property coverage, thanks for the feedback on the UI we'll adjust to make that more obvious.

In the renters insurance market our ALE numbers are pretty normal (or better!), so wanted to get a sense of what you think is needed here.

staticautomaticOP6y ago

Whether or not your max ALE limit is "normal" is beside the point: my experience tells me that the amount is insufficient to cover one's probable downside risk in a major metro area, especially for unit larger than 1 bedroom.

I live in SF. My personal best case scenario in the event of a permanent relocation (insurer freely pays out limits without me having to hire an attorney, I use none of my ALE coverage in the immediate aftermath of my displacement, I relocate to a rent-controlled apartment with the same amenities), is that if I'm extremely lucky, $100K might last me 4 years before I have to leave SF entirely.

jermaustin16y ago

> 100k might last 4 years

ALE is not meant to permanently replace your apartment. I don't understand why you would be expecting 4 years of living expenses to be covered in the case of your apartment burning down. I wouldn't even expect 4 months. It is meant to help you get back on your feet, and go to a hotel for the immediate aftermath while you look for a new place to stay.

You lost your apartment, not your entire livelihood. Chances are you still have an income to pay rent and a big chunk of contents coverage to help you out with down payments, and honestly, the insurance company should be going after the building owner.

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