Additional living expense coverage is a type of insurance that you may have in your homeowners or renter’s policy in Texas. It covers increased costs and expenses if you’re unable to live in your home after a covered loss.
It’s important to understand what additional living expense insurance is, what it covers, and what it doesn’t cover. You must know how to make your claim, and what to do if the insurance company doesn’t treat you fairly.
Haun Mena explains claiming additional living expense coverage in Texas. Our Houston insurance claim lawyers can help.
What is Additional Living Expense (ALE) Insurance?
Additional Living Expense (ALE) insurance pays for increased living expenses when a person is displaced from their home because of a covered loss.
ALE insurance covers shelter and related costs of living like food and transportation, to the extent that these expenses increase because residents are displaced from their homes.
How ALE works
If your home sustains fire, storm, wind, or another type of damage, you may not be able to live at home while repairs are made. You’ll need to stay in a hotel or a rental until your home can be rebuilt or repaired.
Temporary living arrangements can get expensive. It costs more to live out of a suitcase than it costs to live at home. You probably don’t have a kitchen in your hotel room. The hotel may be further away from your work or school, increasing your transportation costs. These increases in your cost of living are called additional living expenses. Your homeowner’s insurance may cover the extra costs.
What does additional living expense insurance cover?
Additional living expense (ALE) insurance covers the increased cost of living of being displaced from your residence because of a covered loss.
Additional living expense coverage may include:
- Hotel, other temporary lodging
- Furnishings, if you’re in a rental property that requires them
- Food, including restaurants if you’re unable to cook
- Pet boarding, if the hotel can’t accommodate your pet
- Gas, mileage and other transportation costs, for work or education
- Laundry expenses
- Storage fees, for larger items that aren’t suitable for a hotel
Does ALE cover the entire cost of living if you can’t live at home?
Remember that ALE covers an increase in the cost of living if you can’t live at home. It doesn’t cover the entire cost. For example, if you usually spend $250 per week on groceries, you may find yourself spending $500 per week while living in a hotel.
It may be necessary to rely on restaurants for some meals that you otherwise would have eaten at home. You can claim the difference as an additional living expense – in this case, $250 per week. Insurance covers the extra or additional cost associated with displacement.
What Won’t Additional Living Expense Insurance Cover?
Here are some things that additional living expense insurance doesn’t cover:
Uncovered losses, maintenance, wear and tear
Homeowners insurance covers unexpected and unanticipated losses. ALE insurance doesn’t cover displacement for routine maintenance or normal wear and tear. It also doesn’t cover displacement because of uncovered events, even if unexpected. In addition, if damage could have been prevented, coverage may be denied.
Vacant property
ALE insurance applies if you are displaced from your residence because of a loss. It doesn’t apply if the property is vacant at the time of loss.
Circumstances where the residence is habitable
If it’s possible to remain in the home while repairs are made, additional expenses aren’t covered. The property must be uninhabitable, and displacement must be involuntary.
Ordinary living expenses
ALE insurance covers additional living expenses, not ordinary expenses that you had before the loss. You may claim payment only for the difference or increase.
Amounts beyond policy limits
ALE insurance has policy limits just like any other type of insurance. In Texas, the usual amount is 10-30% of the replacement cost of the insured property.
Your deductible
A deductible is an amount that’s not covered in an insurance claim. It’s a fixed amount that the party making the claim pays out of pocket before the insurance covers anything. Your deductible amount may vary.
How Long Can You Receive Additional Living Expense Insurance Coverage?
Generally, additional living expense insurance coverage continues until repairs can be made or until you reach your policy limits, whichever comes first.
What pays for increased living expenses if you can’t live in your home after damage?
Insurance that pays for increased living expenses if you can’t live in your home after a loss is called additional living expense insurance. This insurance pays for housing and other costs that result from being displaced from your home.
ALE vs. loss of use insurance
You may also hear additional living expense coverage called loss of use coverage. The two coverages are similar, with minor differences. Loss of use coverage is typically found in homeowners policies as opposed to rental policies. The coverage may be slightly different, with loss of use coverage generally being broader than ALE coverage.
Do I have additional living expense insurance coverage?
If you have homeowners or renters insurance, you probably have additional living expense coverage. Most homeowners and renters insurance policies have additional living expense coverage. For the exact types of coverage, terms and limits, review your policy.
Protecting Your Right to ALE Coverage
When it comes to protecting your right to ALE coverage, documentation is important. You must prove that living away from your home during repairs is necessary. You must also prove your increased expenses and the appropriate amount of reimbursement.
Keep all receipts, invoices, and bills. Take photos of receipts so that you don’t lose them. Keep a diary of the costs that you have and the reasons for the costs.
A lawyer can assist you with all aspects of your claim, including ensuring that you are paid fairly for additional living expenses after home or condominium damage.
Talk to a Lawyer in Houston about Additional Living Expense Coverage
Our team at Haun Mena can help with understanding how to claim additional living expenses.
Contact our team online or call today.
