Additional Living Expense Insurance Claims

Additional living expense claims can be a lifesaver when your home is damaged and unlivable.  In many claims, the damage is severe enough that the property affected is rendered uninhabitable.  If your building has sustained damage from a fire, hurricane, tornado, water damage or any covered loss, you may have coverage under additional living expense.  If the property damage forces those residing in the property to find temporary, alternative housing, an insurer must cover these expenses.  Having to leave a home is inherently stressful on its own, and can be made more stressful by having to navigate the reimbursement or allowance for costs associated with securing temporary accommodations while the damaged property is restored.  Most residential policies contain coverage for these costs, in the form of “additional living expenses” (ALE) coverage.

In addition to housing, ALE can be applied to increased meal costs.  In the event that the policyholder’s inability to prepare meals at home forces them to eat out more often, their insurance policy may pay for the extra meals over and above their usual expenses.  Takeout, restaurant bills, and other associated costs can be included in this.  Once more, these costs are usually limited, and policyholders need to be aware of any particular terms and conditions mentioned in their policy.

Another cost that can sometimes be covered by ALE is transportation costs associated with the loss.  The policy might pay for the extra transportation expenses incurred during the displacement period if the temporary residence is further away from the place of employment or the schools.  Depending on the situation, this may entail higher fuel costs, fees for using public transportation, or even the cost of renting a car.

While many policies differ, it should be noted that most afford accommodations of like, kind, and quality to what the insured had at the time of loss, regardless of distance to the damaged property.  So, it is important to know that insureds do not need to sacrifice quality of living in favor of proximity, so long as the temporary residence is a reasonable approximation to what was had before.  As an example, if you have a 3-bedroom home and your insurer wants to place you in budget hotel with one room, this is not like kind and quality.  The issues comes when the amount of time needed for the rebuild is longer than your amount of coverage will cover for your stay.  So, you may need to get cheaper accommodations to ensure you have a place to stay during the rebuild.  If it’s a long term stay you have the option of leasing a property as well.  As previously noted, the location needs to be like, kind and quality and be in the same area.

ALE is what’s considered a “time-element” coverage.  Generally, the coverage is capped at a certain amount, which could be expressed as a percentage of the dwelling coverage limit.  Furthermore, ALE coverage usually has a time limit, which is typically between 12 and 24 months.  To facilitate a seamless and equitable claims procedure, policyholders should take initiative to communicate with their insurance provider and maintain thorough documentation of their outlays.

Our public adjusters at Prime Adjustments have the experience and the resources to make sure you are getting the best possible treatment from your carrier if you are forced out of your home due to a covered loss.  If you are having difficulty in getting costs associated with having to temporarily relocate, or are just overwhelmed with the process, give us a call for free consultation to see if we can help!