my girlfriends mother home caught fire and was nearly destroyed due to an explosion from the neighbors garage. Despite being covered by the insurance . Her mother is under tremendous stress now after having to be displaced in a hotel until the home is repaired with her 12 year old son and job.
Can she take legal action due to these stress?
You can sue, but honestly it wouldn't be a very strong claim. If insurance has covered the damage, I assume that the hotel would be covered under it as well, so if your only claim is infliction of emotional distress, then it would not be worth filing suit over.
Construction / Development Lawyer
Are they covering the cost to repair her place and the costs incurred as a result of having to live somewhere else? If so, then it is unlikely that there could be additional money for emotional distress. You could sue, but you would probably have a difficult time finding an attorney to take on the case - especially if the stress is the only item of damages remaining.