Many of the standard coverage included in most home insurance policies are ones you might not be aware of. One of those coverage is Additional Living Expenses, also known as loss of use coverage or sometimes abbreviated as ALE. If a covered loss, like a fire, causes you to be displaced from your home, this coverage begins. Knowing what additional living expenses coverage means can help you estimate the coverage amount you might require and how to file a claim.
What is Additional Living Expenses Coverage
Additional living expenses coverage is a crucial aspect of some policies like renters, condominium owners, and homeowners. It assists in covering additional expenses you accrue during a covered loss that renders you temporarily unable to reside in your home.
For instance, a windstorm or fire renders your house unusable, forcing you to move while it is being repaired for several months. When you’re unable to live in your home, this coverage may help cover costs that go beyond your normal spending, like lodging or meals at restaurants.
What Does Additional Living Expenses Coverage Cover
If one of the listed perils in your insurance policy damages your home, this coverage might become effective.
A typical covered peril includes damage brought on by:
- Smoke and fire.
- Windfalls.
- Detonations.
- Falling Items.
- Vandalism.
- Water damage was brought on by a broken pipe.
- Weight of ice, sleet, or snow.
The coverage might assist in paying back increased living expenses, like:
- Fees for lodging or short-term rentals.
- Restaurant invoices.
- The expenses of boarding a pet.
ALE coverage may cover these expenses, but the claimed costs will always be compared to the typical costs of the policyholder’s lifestyle. This is because it can make up the difference between the costs of items you would have to pay if you were still living at home.
What Does Additional Living Expenses Coverage Not Cover
Additional living expenses coverage excludes expenses like childcare, insurance, mortgage, food, and utilities. Generally, you shouldn’t file a claim for anything you regularly paid for before your qualifying event. Furthermore, extra living expense coverage will only kick in if a covered peril renders your home uninhabitable.
Also, events like floods and earthquakes are not covered because they need to be insured separately. To submit their claim for reimbursement, claimants must maintain thorough records, which should include mileage and transaction receipts. Your claims might not be approved if you can’t produce documentation of your costs.
How Much Additional Living Expenses Coverage Is Offered
The maximum amount your policy will pay for increased living expenses following a covered loss is known as the limit of the coverage. A certain amount of additional living expense coverage is likely included in your policy. Also, the amount is determined as a percentage of another policy coverage limit.
For instance, your additional living expenses limit may be a part of your dwelling coverage limit, especially if you have homeowners insurance. It’s also likely that you will discover that it offers temporary coverage.
How to File an Additional Living Expenses Coverage Claim
Maintaining track of your expenses is crucial as most insurers only cover ALE coverage relief. While each business has its unique procedure, the process of submitting a claim looks like this:
- In the event of a loss, it is crucial to contact your insurance company immediately. Also, request a written list of the things that their ALE coverage will pay for.
- Keep track of all receipts for lodging, meals, and other costs received during your absence. Keeping them chronologically ordered could expedite the claims procedure.
- Write a brief description of every expense for your claims representative. They might be able to save a ton of time later on by using this to confirm whether a cost is covered.
Your insurance provider will instruct you to submit your receipts. In addition, you might be able to offer them online or in person. After your claims are filed, you will get paid for authorized ALE coverage.
How Long Does Additional Living Expenses Coverage Last
ALE coverage is provided for the period when a covered loss prevents occupancy of a rental property until the property is restored or rebuilt. During this time, the insurance company will cover any additional living expenses.
Is ALE Coverage Important
In most renters insurance policies, ALE coverage is an optional feature. Although it offers important protection during relocation, most of the time it is not mandated by law. It is up to the policyholders whether or not to include this coverage.
What Happens If ALE Coverage Exceeds My Policy Limit
The insurance company will only pay up to the designated limit if your ALE coverage exceeds the policy limit. Any further expenses over that cap might be your responsibility. It’s critical to understand the coverage limit and make plans appropriately.