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Introduction to Additional Living Expenses Coverage (ALE)
There are often stories that after a disaster people are put out into the street, it could be after a renter experiences fire in an apartment building; or homeowners or condo owners facing massive property damages because of storms or other insured risks and disasters.
Additional Living Expenses (ALE) coverage stops you from being in the position of being “on the streets“ or ending up at your in-laws or friends’ houses while your own house is under repair if you have a home, condo, or renter insurance.
This article will guide you on how it works and how to get this coverage.
What Is Additional Living Expenses (ALE) Insurance?
The coverage of homeowners, condominium owners, or renter’s insurance policy which covers the additional costs of living experienced by a policyholder if they are temporarily displaced from their place of residence is referred to as the additional living expenses (ALE) insurance.
This coverage normally amounts to 10% to 20% of the insurance that covers the home.
How Does It Help You?
Apart from the actual monetary coverage, the policy gives you the ability to maintain your independence and privacy in your short-term home.
Which will, in turn, can lessen a lot of stress in a claims situation for you and your family.
You will have peace of mind knowing that you need not try and figure out where to stay while trying to recover from the major disaster.
The working of Additional Living Expenses Insurance
Instances like the increase in a monthly food bill because of having to eat out at restaurants or maybe even the loss of income that might be incurred if the insured person has been renting out part of their dwelling to a tenant are all covered under the additional living expenses insurance.
The insured person is covered by the insurance for the extra expenses, which they may experience as a result of being temporarily displaced from their home, maybe because of a fire or a flood.
Suppose, a tornado makes your house unfit to live in, needing you and your family to relocate for several months until your home has been repaired.
So the ALE coverage helps pay for expenses like hotel stays, food in restaurants till the time you are able to return to your home. A few of the other items provided for under ALE coverage are:
- Costs of doing laundry – because you don’t have access to a washer and dryer at your temporary home and you have to send your laundry out then laundry costs may get covered.
- Furniture rental – The rent of special items you are used to having may be covered and considered.
- Storage costs – under special circumstances it may include cost for contents
- Moving or displacement costs
- Pet boarding
Even if the above-mentioned costs could be covered by ALE, there will always be an assessment of claimed costs in comparison to the normal costs of a policyholder’s lifestyle.
Because you are not living at your home, this assessment is necessary because additional living expenses are meant to cover the difference between what you normally pay for things and what you now have to pay.
What is not included in ALE coverage?
ALE does not cover the damage to your belongings or to the structure of your home those can be taken care of by other elements of your insurance policy if they are covered.
Most homeowner’s policies have standard inclusions like dwelling and personal property coverage, and liability coverage.
Conclusion
If a homeowner is displaced and must pay out of pocket as a result then the additional costs incurred are covered by Additional Living Expenses (ALE) Insurance.
Most homeowners or renters insurance policies include ALE coverage. This insurance covers expenses such as food and the cost of staying at a hotel is covered by the insurance until the primary dwelling is liveable.
