Imagine: you’ve just lived through a disaster like a hurricane or house fire. You and your family are fine, but your home is so damaged that it is unlivable. While it can be repaired, you cannot live there for the next several weeks or months. What are you supposed to do? Where are you supposed to go?
For most people, the answer is a hotel or some other form of temporary housing. However, the costs of hotel rooms add up quickly, especially if you have a family to house. That is why many home insurance companies offer Additional Living Expense overage. Here’s what you need to know about this type of insurance, how it helps you, and how to ensure your claim is covered.
What Is Additional Living Expense Coverage?
Additional Living Expense (ALE) insurance coverage is a type of insurance policy that covers the extra costs incurred by damage to a home that makes it unlivable. Standard home insurance will cover the costs of repairing a property for covered types of damage, such as materials and labor, but nothing else. An ALE policy or clause expands coverage to give policyholders the resources to temporarily relocate while their homes are repaired.
These policies are usually riders added to a standard homeowner’s policy. They typically cover up to 10-20% of the insurance’s limit for repairing the home. For example, an ALE rider on a policy with a $500,000 limit on damage repair would typically cover between $50,000 and $100,000 in additional living expenses.
However, these riders do not increase your insurance premiums by that much. They are relatively inexpensive because they are only triggered if a home is rendered uninhabitable. Most damage leading to insurance claims is significantly less severe than that, so most insurers do not charge high premiums for ALE riders.
Benefits of ALE Coverage
ALE policies cover a broad range of activities. They usually offer comprehensive coverage, meaning they cover all expenses incurred by your temporary relocation unless they are expressly excluded. Some of the most essential benefits of having ALE coverage include compensation for costs like:
- Temporary housing
- Utility bills at the temporary housing
- Setup fees, hookup fees, and other one-time costs at your temporary home and once you return to your repaired home
- Restaurant meals while you do not have access to a kitchen
- Moving services to relocate
- Mileage reimbursement for any increased distance between your temporary home and locations like your workplace or children’s schools
- Pet boarding facilities
How to Tell If ALE Coverage Is Included in an Insurance Policy
If you are unsure whether you have ALE coverage, reviewing your policy before making a claim is critical. Read your policy carefully, looking for clauses or riders that mention “additional living expenses” or “loss of use.” You can also ask your insurer or request a policy review from a qualified insurance attorney.
If you have ALE coverage, you should understand what it covers and when it applies. Insurers may set different standards in the policy regarding when a home is considered uninhabitable. For example, one contract may define an uninhabitable dwelling as one that does not have running water, while another may use functioning electricity as the standard. Before leaving the property and assuming that insurance will cover your expenses, you must be confident that your insurer will consider the home uninhabitable, so ALE coverage will apply.
Furthermore, you should clearly understand your coverage limits and any exceptions. ALE policies only cover additional living costs beyond what you would typically spend. If your mortgage lender agrees to pause your mortgage payment for a month, you will still be responsible for covering your own costs up to the amount you would spend on the mortgage. If you have any questions about your policy, do not hesitate to get professional legal counsel.
How to Make Sure Your ALE Insurance Claim Is Accepted
If you need to make an ALE claim after a disaster like a hurricane, you must be prepared to defend your needs to your insurer. If you do not keep appropriate records and take precautions, you may struggle with your ALE claim. After a disaster, if you do not believe your home is livable, you should make sure to do the following:
- Consult with an experienced insurance attorney. Before doing anything else, you should reach out to qualified ALE insurance attorneys like the experts at The Professional Law Group. Your attorney will help you understand what is covered by your policy and guide you through everything to come to make sure your claim is honored.
- Notify your insurer of the incident as soon as possible. Next, notify your insurer of the incident. Your attorney will help you submit the notification and ensure that you include all relevant details without harming your claim.
- Keep records of all purchases and expenses you want to be reimbursed. Once your attorney has confirmed that you have ALE coverage, you can begin the relocation process. Keep all receipts for everything from hotel rooms to restaurant meals to transport costs, so you have evidence for your claims.
- Collect documentation of your regular monthly expenses. Gather credit card and bank statements to show how much you usually spend to immediately head off any disputes over your claim.
Once you have done this, you can work with your attorney to submit a claim for any additional expenses you incur. They will communicate with your insurer to ensure that they do not attempt to deny your claim for no reason and to help you receive the compensation you need.
At The Professional Law Group, we understand how stressful it is to be forced out of your home by a disaster. We are dedicated to advocating for clients like you after floods, hurricanes, and fires to ensure you receive the insurance funds you’re owed under your policy, including any additional living expense reimbursement. Schedule your consultation to learn more about how we can assist you during this difficult time.
