Insurance companies also subtract your regular expenses when figuring out how much you’re owed for additional living expenses.įor instance, living in a hotel may mean more restaurant meals, but it will likely also mean fewer groceries. It’s important that you save receipts for expenses while you’re living elsewhere. You live at a nearby hotel and have one restaurant meal each day, put your undamaged furniture into storage and buy new clothing to replace clothes that were damaged in the fire.Ī homeowners insurance policy should reimburse you for those items up to your ALE coverage limit as long as they mirror your typical lifestyle. You need to live elsewhere for two months while workers remove debris and repair your home. Let’s say a fire causes extensive damage to your home. Let’s look at an example of when ALE coverage would kick in. “You need to know if your property has been properly cleaned or if your insurer is trying to take a shortcut,” she warns. There may be smoke residue, damage within the walls or dangerous materials like asbestos that were exposed by the fire. What if your home is only partially damaged? “For those victims the rub is whether it’s safe to reinhabit,” says Amy Bach, executive director of San Francisco-based United Policyholders, an advocacy group for those who are insured.
“Some specialty carriers have no time or dollar limit for high net-worth clients, but only a few provide unlimited ALE,” says Ruiz. Check your home insurance policy’s declarations page for your total ALE coverage limit. The insurance company is likely to set a specific time frame for completion of the repairs, so don’t expect three years as opposed to the usual two years in places where contractors and supplies are available.Īlso, home insurance policies often set time or dollar limits on ALE in the policy and sometimes both. “The yardstick is a similar kind of home or apartment to yours,” says Insurance Information Institute spokesperson Janet Ruiz. The homeowner and insurer will negotiate exactly what ALE will cover. Don’t expect a stay at the Four Seasons-unless that’s your normal standard of living. Homeowners insurance companies provide enough ALE reimbursement for you to maintain your normal standard of living. You could also ask your homeowners insurance company if they offer “actual loss sustained” coverage, which increases the ALE coverage beyond a set percentage. If you feel that’s not enough to maintain your standard of living if you can’t live at home, talk to your insurer about increasing your ALE limit. So if your house is insured for $300,000, for example, your policy may have $60,000 for additional living expenses.
ALE coverage is often set at 20% of your dwelling coverage.Īdditional living expenses insurance is often set at 20% of your dwelling coverage.
Is There a Limit on Additional Living Expenses Coverage?ĪLE is typically found under the “loss of use” section in a home insurance policy.
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