Additional Living Expenses or ALE is a standard coverage provided in most homeowners, condo, and renters insurance policies. It covers you for additional costs incurred if you are temporarily unable to live in your home due to an insured peril.
For example, a pipe breaks, a hot water tank bursts or a fire leaves your home uninhabitable, and you have to seek temporary accommodation while your home is being repaired. ALE coverage pays for additional costs associated with your having to temporarily relocate such as hotel bills or temporary rental fees, laundromat expenses, restaurant meals.
When does the Additional Living Expenses (ALE) cover kick in?
ALE coverage is triggered if your home is damaged by a covered event listed in your insurance policy. Below are perils usually covered in a standard policy:
The ALE coverage limit is the maximum amount that your policy will cover for additional living expenses. The dollar amount is indicated in your insurance policy and is usually a percentage of another coverage limit, for example, 10% of the dwelling/building coverage limit. Additional Living Expense coverage usually has a time frame associated with it, so you must check your policy carefully.
Additional Living Expenses coverage does not pay for:
For example, a windstorm caused damage to your home, to the point where it is not habitable. You had to stay at a short-term rental at a monthly rate of $3,000 for a period of 1 month. The short-term rental does not have a washing machine, so you have to spend $50 a week on laundry. Additionally, the short-term rental is farther away from the children’s schools and the your workplace, so you are spending more on fuel.
Prior to the loss (per month) After the loss (per month)
Rental none $3,000
Laundry none $200 ($50 x 4 weeks)
Fuel $200 $300
TOTAL $200 $3,500
Based on the above simplified example, ALE coverage would compensate the insured for the $3,300 additional expense for the 1-month period that you had to temporarily relocate.
As discussed earlier, ALE claims requires an assessment of how claimed costs compare to the normal costs of the policyholder’s lifestyle. This is because additional living expenses are meant to cover the difference between what you normally pay for and what you now have to pay due to the fact that you had to temporarily relocate.
If your property sustains damage, we’re here to help you. If the damage has made your home uninhabitable, we’ll give you all the information and guidance you need to make a claim for Additional Living Expenses (ALE).
Unsure if the damage to your property is covered by your insurance? Give us a call anyway. Part of our expertise as public adjusters is understanding and interpreting your policy.
JF Public Adjusters NY offers a FREE claim review and consultation in New Paltz, New York and surrounding areas.
Call or text us today on (917) 272-8793.