Imagine you have lost your home to a fire, or you have to relocate due to major flooding from a storm. How will you pay for it? What relief can you count on? Fortunately, your homeowners or renters insurance policy can provide relief. Additional Living Expense or ALE, as it is also called, will prevent you from being “homeless” while your home is being repaired. This coverage is also referred to as “Coverage D” or “Loss of Use”. What is Additional Living Expense? And, how does it work?
How Does Additional Living Expense Coverage Work?
Let’s start with “What is Additional Living Expense?” Additional Living Expense (ALE) coverage is exactly what it sounds like. An insurance covered loss has forced you out of your home. Thankfully, ALE coverage will pay for the increase in expenses you will most likely incur. Most insurance policies read like this: “Additional Living Expense, meaning any necessary increases in living expenses incurred by you so that your household can maintain its normal standard of living.”
You must understand that ALE covers the ADDITIONAL cost NOT the whole cost. For example, your apartment floods. Unfortunately, you are forced to find temporary housing while your landlord mitigates the water damage. Normally, your rent is $600 a month but the temporary housing you find is $900 a month. The ALE coverage will give you $300 each month, not the full $900. Please, understand that ALE will NOT cover additional expenses that are not deemed necessary. For instance, if the temporary housing that you chose was $1,200 a month because it was higher quality than your previous dwelling, your insurance company will most likely deny ALE coverage for your rent. Again, ALE coverage is designed to pay the increase in expenses from your normal standard of living. Keep that in mind when you are making your purchases. If you’re not careful you may be stuck with the bill.
What Does ALE Cover?
Additional Living Expense Covers Minor Expenses Such As:
- Pet Boarding Costs. Your pets will still need care while you’re unable to live at home. Any fees you incur from boarding them will be covered.
- Laundry Services. Damage to your laundry facility will cause you to have to go to the laundromat. This additional cost is covered.
- Storage Units. Let’s say some of your furniture and personal belongings were not damaged. Thankfully, ALE will cover the cost for storage of these items until you are able to move them back into your home.
- Increased Transportation. You may have to transport your children to and from school if you are placed outside of the school district. Undoubtedly, the additional transportation will increase your fuel expenses. Fortunately, this is covered. Do you have to drive further to work? Covered. Do you have to travel further to the grocery store, doctors, laundromat, basketball practice? Your increased expenses are covered. Again, keep meticulous records for all of your transportation expenses. Any increase you incur will be covered.
Additional Living Expense Covers Major Expenses Such As:
Furniture Rental. If the temporary housing you find does not come furnished, ALE will cover the cost to rent furnishings. However, they must be comparable to the furnishings you had in your home prior to your loss. For example, if you had a 30″ TV before the loss and you rent a 65″ flatscreen smart TV, your ALE will most likely be denied on this expense.
Temporary housing. Hotels and apartments are covered here. Keep in mind that if you had a mortgage on your home YOU are still responsible to make your payments while repairs are being made.
Increased Transportation. Do you have to drive further to work? Covered. Do you have to travel further to the grocery store, doctors, laundromat, school, basketball practice? All of your increased expenses are covered.
Meals. This can be a tricky. It is important to keep in mind that your ALE coverage is paying for items OVER your normal standard of living. This means fancy surf and turf dinners and high bar tabs are probably not going to be covered. This area is more intended to cover the additional expenses of dining out since you are unable to cook at home. Furthermore, calculating an accurate estimate of what your family normally spend per month on food will help keep your numbers in line.
Tips to Ensure ALE Coverage Approval
- Keep Meticulous Records. Keep all of your receipts! Gas, food, utilities etc. If you’re driving an extra 15 miles a day to take your children to school you will be covered. Document your milage. The more documentation you have, the more likely you are to be covered.
- Do The Math. It’s a good idea to go through an average month of finances and expenses to find out how much it costs to sustain your family’s standard of living.
- Keep It Simple. Remember, assessments will be made by the insurance adjuster to ensure that the costs that you’re claiming are comparable to the normal standard of living prior to your loss.
- Don’t Over Do It! During a difficult time it feels good to “treat yourself.” Go for it! However, keep in mind that you are going to have to have explanations for your expenses in order for the ALE coverage to apply to your costs. If you stay within budget of your normal standard of living you most likely will NOT get audited.
There is no doubt that you can venture the insurance claim process alone. However, receiving maximum settlement, proper coverage and financial support from your policy means getting help. At AllCity Adjusting , our team of highly trained and educated insurance professionals can help ensure your financial recovery following a major loss. Don;t do this alone. We are here for you.
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