Many residents are displaced from their homes due to such things as natural disasters, water damage or fires. Most homeowners or renters insurance policies cover Additional Living Expenses (ALE) also known as Loss of Use and the policy specifies the amount of coverage that is allowable. ALE is basically intended to cover the insured person for the extra expenses he or she may incur due to being temporarily displaced from their home.
As soon you know you cannot live in your home due to a disaster you should contact your agent or insurance company so you may get advice on what is covered. Coverages vary depending on the type of insurance policy you have.
ALE covers expenses above and beyond your normal living expenses, and your insurance company will require that all claims must be supported by receipts and/or other documentation. Additional Living Expenses covers costs including a hotel or temporary residence such as an apartment or home which is similar to your property. For example if you lived in a three bedroom house the insurance company will not pay for a six bedroom home. Other expenses that are covered may be additional food expenses that would incur such as eating out in a restaurant when staying in a hotel that does not provide kitchen facilities. Boarding pets, relocation costs and storage are other additional costs that may be covered under your policy.
Additional Living Expenses only pays for the expenses you wouldn’t have had is disaster had not struck. In some instances, any money you save from living in a temporary place is deducted from the reimbursement. For example, an insurance company will deduct the amount of money you would have spent on groceries from the amount reimbursed from the restaurant bills that occur when you are staying in a hotel. If your utility bill is less at a temporary residence versus what your bill would have been at your own house, then the savings may be subtracted from the amount you are reimbursed for additional living expenses.
It is always a good idea to contact your insurance carrier first to find out what expenses are and are not covered with the type of policy that you have.
If you require a hotel or temporary furnished residences while your damages are being repaired please contact THD for information at 800.817.3220 or at www.temporaryhousingdirectory.com.
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