But what exactly is extra expense insurance, how does it work, and how can you determine if your insurance provider offers it as part of your coverage? Keep reading to learn more about this safeguard and what it might cover.
What is extra expense insurance?
At HAI Group, extra expense coverage is available in most standard property policies, with additional limits available upon request.
Why extra expense insurance is so critical for housing agencies
For public and affordable housing agencies, the ability to continue operations during and after a disruption is essential. Core services shouldn't have to be put on hold, as significant delays could affect the well-being of residents and the communities served.
Coverage can vary by carrier, but in general, extra expense insurance is valuable for:
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Ensuring continuity: Housing agencies provide critical services to residents, and long-term disruptions can have serious community impacts. Extra expense insurance helps ensure that services remain operational or resume quickly.
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Safeguarding finances: Large, unexpected costs—such as relocating staff or residents, renting office space, or acquiring temporary equipment—can strain a housing agency's finances. This coverage can help alleviate that burden by reimbursing certain eligible expenses.
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Supporting rapid recovery: The faster normal operations are restored, the less long-term damage the organization and residents will face. Extra expense insurance allows agencies to make quick decisions to get back on track without worrying about unplanned costs.
Once a covered event, such as a fire or natural disaster, causes operational disruption and is reported to your insurance provider, you'll typically work with an adjuster to evaluate additional costs needed to keep your operations running. You'll then submit a claim for the extra costs covered under your policy, and your carrier will reimburse approved eligible expenses according to the policy.
What does extra expense insurance include?
Extra expense coverage can vary by insurance provider. Always read your policy closely and check in with your insurance professional if you have any questions. In general, the coverage can help agencies with:
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Moving to a temporary location
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Shipping existing business contents, such as furniture and equipment, to the new location
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Paying employees overtime or hiring temporary workers
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Setting up phone and internet connections
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Communicating with clients, partners, suppliers, and subcontractors
Extra expense coverage can also assist with issues concerning residents, such as relocation. Again, check with your insurance professional or carrier for specifics on eligible extra expenses.
Common misconceptions about extra expense insurance
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"My property insurance will cover everything." While property insurance can cover repairing or replacing damaged property, it won't necessarily cover the extra costs needed to keep your operations running.
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"I don't need this coverage for minor disruptions." Even minor incidents can cause significant financial strain when extra expenses, like temporary relocation or rush orders for repairs, are involved.
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"I can add this later if needed." Like all insurance, extra expense coverage must be in place before an event occurs. Planning ensures you're not left scrambling when disaster strikes.
Key considerations
When evaluating your agency's extra expense coverage, keep the following in mind:
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Coverage Limits: Ensure the policy limits match your potential needs, particularly if you operate in a high-risk area or face significant operational costs.
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Covered Perils: Confirm that the policy covers events that could realistically impact your operations.
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Exclusions and Waiting Periods: Be aware of any waiting periods before coverage begins and exclusions for certain types of disruptions.
Is extra expense insurance right for my agency?
Every housing agency has unique needs, so assessing whether extra expense insurance is right for your organization is essential. Consider the following:
- Do you rely on specialized equipment that may need to be replaced quickly in case of damage?
- Would your operations be significantly affected if you had to relocate temporarily?
- Are there key personnel you need to retain during operational downtime?
If you answered "yes" to any of these questions, extra expense insurance may be an essential addition to your insurance portfolio.
Bottom line
HAI Group is committed to providing housing agencies with the protection they need to manage risk and maintain operations. Extra expense insurance is one way we help ensure your services continue, even in the face of unexpected disruption.
Contact your HAI Group Account Services representative today to learn how extra expense insurance can support your housing agency.
This article is for general information only. HAI Group makes no representation or warranty about the accuracy or applicability of this information for any particular use or circumstance. Your use of this information is at your own discretion and risk. HAI Group and any author or contributor identified herein assume no responsibility for your use of this information. You should consult with your attorney or subject matter advisor before adopting any risk management strategy or policy.
