Your Guide to Additional Living Expenses (ALE) Coverage

When unforeseen events make your home uninhabitable, the financial implications of such events can extend beyond the simple everyday repair costs. Additional Living Expenses (ALE) coverage in your homeowners insurance policy is especially designed to alleviate the burden of temporary living costs during these times.

At Avner Gat Inc., we’ve handled hundreds of homeowners’ insurance claims, and in our industry experience, one of the most commonly misunderstood aspects here is the payout for Additional Living Expenses (ALE). This guide is here to clarify how ALE coverage works and everything else you need to know.

What is ALE Coverage?

ALE coverage, also known as “loss of use” coverage, mainly reimburses you for extra expenses incurred when a covered peril forces you to leave your home temporarily. It’s primarily designed to cover the gap between your normal living expenses and other increased costs of temporary living arrangements.

Common triggers may include fire, smoke damage, water damage from burst pipes, and other insured events.

How ALE Coverage Works

ALE coverage typically accounts for 20% to 30% of your dwelling coverage limit. For instance, if your home is insured for $300,000, your ALE coverage might range from $60,000 to $90,000.

The coverage kicks in when your home becomes uninhabitable due to a covered loss, and it will usually continue until your home is livable again, you reach your policy’s ALE limit, or the specified time limit (which is often 12 months) expires.

Our team at Avner Gat, Inc. collaborates with expert General Contractors to assess the extent of your property damage, ensuring accurate evaluations to support your ALE claim.

Common Situations That Trigger ALE

Not every inconvenience qualifies for ALE. Insurance companies typically require a clear, covered event to trigger the benefit. Situations where ALE may apply include:

• Your home is damaged by a kitchen fire and deemed unsafe to live in.
• A storm causes structural damage that requires extensive repairs.
• Water damage from a broken pipe forces you out while restoration work is done.
• Smoke damage from a nearby wildfire renders your home unlivable.

Keep in mind: Planned renovations or voluntary moves are never eligible for ALE coverage.

What Does ALE Cover?

ALE coverage reimburses for reasonable expenses that exceed your normal living costs, including:

• Temporary Housing: Hotel stays or rental accommodations.
• Increased Food Expenses: Dining out if your temporary housing lacks cooking facilities.
• Transportation Costs: Additional commuting expenses due to relocation.
• Laundry Services: If your temporary housing lacks laundry facilities.
• Pet Boarding: If pets can’t stay with you in temporary housing.
• Storage Fees: For storing belongings during repairs.
• Utility Connection Fees: Setting up utilities in temporary housing.

To better understand what qualifies as reimbursable under your policy, it’s helpful to review a detailed breakdown of Additional Living Expense (ALE) coverage, including common scenarios and tips for maximizing your claim.

It’s essential to maintain documentation and receipts for all additional expenses to ensure proper reimbursement.

What ALE Doesn’t Cover?

While ALE is comprehensive, it doesn’t cover:

• Normal Living Expenses: Regular mortgage payments, property taxes, or insurance premiums.
• Upgrades: Choosing luxury accommodations beyond your standard of living.
• Unrelated Costs: Expenses not directly related to displacement, such as new furniture purchases.

The goal is to always maintain your pre-loss standard of living, not to enhance it.

Calculating Your ALE Payment

To estimate your ALE reimbursement:

Current Living Expenses – Normal Living Expenses = Reimbursable ALE

For example:

• Pet Boarding: If you previously cared for your pet at home and now have to pay $45 per night for boarding, your entire amount is reimbursable.
• Commuting Costs: If your temporary housing increases your commute, the additional fuel or transportation costs will be covered.

Remember, only the extra costs incurred due to displacement are the ones eligible for reimbursement.

Special Considerations

Rental Income Loss

If you rented out part of your home and it’s uninhabitable due to a covered loss, ALE coverage might compensate for the lost rental income during repairs.

Government-Ordered Evacuations

In cases where authorities mandate evacuations (e.g., wildfires), ALE coverage can assist with additional living expenses, even if your home isn’t directly damaged.

State-Specific Regulations

Some states have specific mandates regarding ALE coverage. For instance, in California, if a state of emergency is declared, insurers must offer at least 24 months of ALE benefits, extendable by 12 months under certain conditions.

Evacuation Without Property Damage

One key nuance many homeowners miss: ALE may still apply even if your home isn’t totally damaged. If a civil authority (e.g., fire department or local government) issues a mandatory evacuation due to a covered peril.

So, meaning if you must leave due to a nearby wildfire or hazardous event, you might still be covered for living elsewhere temporarily.

Tips for Managing ALE Claims

• Review Your Policy: Understand your ALE coverage limits and conditions.
• Keep Detailed Records: Save all receipts and document additional expenses.
• Communicate with Your Insurer: Inform your insurance adjuster about your temporary living arrangements and expenses.
• Seek Pre-Approval: For significant or unusual expenses, get written approval from your insurer.

Why Choose Avner Gat, Inc.?

Additional Living Expenses (ALE) coverage is a very important component of homeowners’ insurance, providing financial support during challenging times. It helps cover costs like temporary housing, meals, and other necessities if your home becomes uninhabitable due to a covered loss.

An experienced and licensed public adjuster can help you overcome the challenges of managing your homeowners’ insurance claim. Before consulting a lawyer, consider hiring a licensed public adjuster like Avner Gat, Inc. to negotiate your ALE claim and maximize your settlement. We can assist you in getting the best possible settlement offer you’re entitled to under your insurance policy.

For questions regarding your ALE claim, call Avner at (818) 917-5256.