What is Additional Living Expenses Coverage?


WRITTEN BY: Mark Romero

UPDATED: SEPTEMBER 21, 2022 | 1 MIN READ

Additional living expenses coverage is a regular part of a standard homeowner’s or renter’s insurance policy. Learn what it covers and when you need to file a claim.

What Is Additional Living Expense Coverage (ALE)?

When you experience damage or destruction to your home, additional living expense coverage helps pay in part for what is necessary while your home is undergoing repairs or replacement for the covered loss. A typical homeowner’s insurance policy provides an ALE coverage limit of 20-30% of your dwelling, but you should always review your policy to ensure your limit.

Commonly covered perils to the home additional living expense will provide include:

What is covered?

Additional living expense coverage can pay for hotel stays, boarding your pet, restaurant meals, and several other expenses which can arise when your home is not habitable. 

What isn’t covered?

The additional living expense coverage has price limits and does not cover the direct damage to your home or belongings. However, other coverages, such as your dwelling and personal property, help protect against those types of losses.

Keep in mind the additional living expense coverage only applies to covered damages. For example, if your home becomes flooded, but you don’t have a separate policy for flood insurance, your loss can claim it is not a covered peril. In that case, you wouldn’t be able to gain reimbursement for additional living expenses.

Do you have to pay a deductible for additional living expense coverage?

Most standard homeowner policies reimburse the difference between your average home expenses and additional living expenses. However, policies have set limits on the amount they pay out, and it is possible you may be subject to a deductible. Check your declarations page on your homeowner’s policy to see the amount covered in ALE and whether you are responsible for an upfront deductible, or contact your home insurance company directly.

What Counts as an Additional Living Expense For a Home Insurance Claim?

Most additional living expense coverage on a standard homeowner’s policy includes the following:

  • Temporary housing (hotel, rent, etc.)
  • Restaurant meals
  • Storage unit for your belongings
  • Extra mileage if your distance to work increases
  • Parking costs
  • Public transportation
  • Pet boarding

You should keep your expenses in line with your standard of living, or your insurer may question and find grounds to cease reimbursement of costs.

Additional Living Expense Coverage Considerations

Everyone’s individual insurance needs vary. Loss of use coverage may not be enough when you go over any necessary increases for additional living expenses in case something happens to your home. Understand the amount you have on your policy and determine if you need additional coverage.

How much coverage is included in a homeowner’s policy?

Additional living expense coverage is typically for 20 to 30% of your dwelling coverage. So, for example, if your dwelling coverage limit is $200,000 and your limit for ALE is 30%, your loss of use coverage is $60,000.

How much coverage is included in a renter’s policy?

With a renter’s insurance policy, the coverage is typically the same as a standard homeowner’s policy, around 20 to 30% of your dwelling coverage. 

How much coverage is included in a condo owner’s policy?

Most policies include coverage limits of around 50% of the value of the condo policy’s insured contents.

How long does the coverage last?

Home insurance companies can limit how long a standard additional living expense coverage lasts. The period can vary, but usually, limits are within a year, though some companies allow coverage for up to 2 years in some cases. Of course, the length can also change between a renter or condo policy, so it is best to be clear on this by checking your own policy or contacting your home insurance company.

Does flood insurance include loss of use coverage?

Flood insurance policies can include additional living expenses or loss of use coverage. However, it is vital to check your flood insurance policy to know for sure.

How does loss of use coverage work if you rent out part of your home?

If you rent a part of your home and damage makes it uninhabitable, you can claim the rental income you are missing for reimbursement under fair rental value coverage. However, the insurance company does not cover expenses, such as utility costs, if they don’t occur while the renter is living elsewhere.

FAQs

Is additional living expenses coverage the same as loss of use?

The terms for additional living expense coverage and loss of use are interchangeable and mean the same thing.

What is an ALE insurance claim?

File an ALE claim to cover the difference between regular expenses and temporary expenses incurred during a loss. 

What does a home insurance policy consider additional living expenses?

Additional living expenses include the cost of hotel stays, meals, and pet boarding. Basically, any expense above your normal everyday expenses.

How are ALE claims paid?

Depending on your insurance company, some allow you to file a claim and receive an advanced cash payment. However, review your policy to understand the insurance company pays your claims.

What doesn’t loss of use coverage cover?

Loss of use coverage helps to provide reimbursement for any EXTRA expenses incurred during your time out of your home. However, it doesn’t offer any reimbursement for costs you are already responsible for, such as your car payment, mortgage, HOA fees, etc.

Understanding Additional Living Expense Coverage

It’s important to prepare to file an ALE claim. Make sure you are ready to provide receipts for your expenses and everyday expenses for comparison, so you can easily document the difference in cost for your reimbursement. To make sure you have the best home insurance coverage possible, get multiple quotes today.