When disaster hits your home, your mind immediately jumps to the safety of your loved ones and to assessing the property damage.
But what about the following days, weeks, and months when your home is uninhabitable and you’re displaced?
This is where Additional Living Expenses (ALE) coverage serves as the safety net you need to navigate these challenging times.
In this blog, you’ll learn:
- The basics of ALE coverage
- What it typically covers
- When coverage applies
- ALE coverage limits
What is ALE coverage?
ALE coverage helps homeowners and renters pay for any increases in living expenses when a covered loss forces them out of their homes during repairs or construction.
If you’re unfamiliar with ALE, here’s an example of how it offers Florida residents protection.
Let’s say your home suffered extensive damage from a hurricane.
While your standard homeowners’ policy covered the structural repairs, ALE would cover additional costs associated with temporary housing, food, and other daily expenses exceeding your normal living cost during displacement.
What does ALE coverage include?
This form of insurance coverage is meant to help people maintain a sense of normalcy in their standard of living after a disaster has displaced them.
For these reasons, ALE typically includes:
- Temporary housing costs of a hotel, rental home, or apartment.
- Additional food expenses beyond a typical grocery bill.
- Transportation costs if temporary housing is farther from school or work.
- Laundry or dry cleaning expenses if you don’t have access to laundry facilities.
- Storage costs for your belongings while displaced.
These are some examples of what’s covered under ALE coverage, but it’s also important to note that it doesn’t cover all expenses.
It only covers an increase above normal living costs.
For example, if your mortgage is $2,000 per month and your temporary housing cost is $2,500, ALE typically would cover the $500 difference.
When does ALE coverage apply?
ALE coverage kicks in when your home is uninhabitable due to a covered peril in your policy. This typically includes:
- Explosions
- Falling objects
- Fire or smoke damage
- Lightning strikes
- Windstorm or hurricane damage
- Water damage from plumbing failures
If a peril is excluded from your policy, ALE coverage won’t apply. An example of this is flood damage.
What are your coverage limits?
As a Florida resident, your home and belongings are vulnerable to natural disasters, so adequate ALE coverage is important.
The aftermath of these natural disasters can leave you displaced for extended periods.
However, you should be aware that insurance policies set limits on ALE coverage based on:
- A percentage of your dwelling coverage (typically 20-30%)
- A specific dollar amount
- A time limit (usually up to 12-24 months)
Are you covered?
When it comes to ALE coverage, you want to be proactive rather than reactive. That’s why we’re encouraging you to review your policy with your advisor so you understand the specifics of yours.
At Boyd Insurance & Investments, what matters most to you matters to us, and it’s our mission to help give our community peace of mind when disaster strikes.
Contact our team today to learn how ALE coverage can offer protection.
Frequently Asked Questions
What is Additional Living Expenses (ALE) coverage?
Additional Living Expenses (ALE) coverage helps homeowners and renters pay for increased living costs when a covered loss makes their home temporarily uninhabitable. This coverage can help pay for expenses such as temporary housing, meals, transportation, and other necessary costs that go beyond your normal living expenses.
What does ALE coverage typically include?
ALE coverage commonly includes temporary housing costs, additional food expenses, transportation costs, laundry or dry cleaning expenses, and storage fees for personal belongings. Coverage only applies to costs that exceed your normal day-to-day living expenses.
When does ALE coverage apply?
ALE coverage applies when your home becomes uninhabitable due to a covered peril listed in your insurance policy. This may include events such as fire, smoke damage, hurricanes, windstorms, lightning strikes, plumbing-related water damage, or falling objects. If the cause of damage is excluded from your policy, ALE coverage will not apply.
Does ALE coverage pay for all living expenses?
No, ALE coverage only pays for the increase in living expenses caused by displacement. For example, if your normal housing cost is $2,000 per month and temporary housing costs $2,500, ALE coverage may only pay the additional $500 difference.
Are there limits to ALE coverage?
Yes, insurance policies usually set limits on ALE coverage. Limits may be based on a percentage of your dwelling coverage, a fixed dollar amount, or a time limit for how long benefits are available. Many policies provide ALE coverage for up to 12 to 24 months, depending on the insurer and policy terms.
