How Additional Living Expenses Coverage Works With Home Insurance

Posted on: 4 April 2017

Have you ever wondered what would happen if your entire house was destroyed by a fire or some other type of disaster? An event like this would force you to have to live somewhere else while your home was being renovated or rebuilt. Not only would this be inconvenient, but it could also be costly. You would still be required to pay your mortgage payments and other expenses, but you would also have to pay to live somewhere else unless you had additional living expenses coverage with your home insurance policy.

What is additional living expenses (ALE) coverage?

ALE is a term that refers to home insurance coverage that provides compensation if you are forced out of your home due to major damages that have occurred to the home. It helps you maintain your current standard of living following a great loss. While many home insurance policies automatically offer ALE coverage, others do not. You should be sure to get an insurance quote for different policies so you can be certain that you would be protected. If you already have this coverage, you may want to talk to your insurance agent to make sure you have enough coverage. The amount you will be compensated for will depend on how much coverage you have with your policy.

What does ALE cover?

If you have ALE coverage on your policy, it will cover a number of different things. Here are some of the expenses it can be used for:

  • Paying your rent – If you will have to live someplace else for months, you may prefer renting an apartment or house while you wait for your home repairs to be completed. ALE coverage would help you pay for this.
  • Paying hotel bills – ALE coverage can also be used to help compensate you for stays in a hotel due to problems in your home. This is commonly used if a person expects to be able to move back home within a few days or weeks.
  • Paying for meals – In addition, you might be able to be compensated for your meals while you are staying at a place other than your home, but it typically only covers the difference between what you have to pay and what you would normally spend on food each day or month.

There are other types of incidentals your policy might also cover if you are forced to move out of your house. If you do not have this type of coverage, you should talk to an insurance agent about getting it. It is an important type of protection you will be glad you have if you ever need to use it.