When a fire or other covered peril renders your home not fit to live in, your homeowners insurance policy provides Additional Living Expense/Loss of Use coverage that pays for temporary housing and other extra expenses commensurate with your current standard of living. ALE also reimburses you for other expenses that rise above and beyond what you would normally spend.
Along with the temporary housing expense, ALE/Loss of Use pays for additional mileage, utilities, groceries, restaurant bills, animal boarding, temporary storage, and other expenses that you incur because of the damage caused by a covered peril.
What Does Additional Living Expense/Loss of Use Cover?
Many claimants are confused about what’s reimbursable under Additional Living Expense/Loss of Use and what isn’t. Basically, Additional Living Expense/Loss of Use reimburses insureds for the cost of maintaining a comparable standard of living following a covered loss that exceeds the insured’s normal expenses prior to the loss.
Here’s a good rule of thumb when tracking ALE/Loss of Use expenses: Ask yourself, “Is this an expense I incurred because of the loss?” If the answer is yes, then you can reasonably submit the expense to your insurance company for reimbursement under ALE/Loss of Use coverage.
For example, if a fire destroys your home to an extent not fit to live in, you’ll have to immediately seek shelter for your family. If that requires a hotel stay, the cost for the hotel and meals are reimbursable through ALE/Loss of Use, along with any additional mileage expense. In addition, if your home is not fit to live in for an extended period of time, ALE/Loss of Use covers the added expense to rent a house or apartment.
Any increase in the cost of utilities, or connect/disconnect fees at your damaged residence, is covered. For example, If your temporary housing has utilities that didn’t incur before, that is 100 percent reimbursable. Of course, you would still need to maintain the utilities in your primary home. Anything above and beyond “normal” at my primary home would be covered under Additional Living Expense.
Another example is mileage. Say your temporary rental unit is located 15 miles further from your job than your home. Or your child, who normally takes the bus to school, now needs to be driven there. That’s additional mileage you normally would not incur and therefore, reimbursable through ALE/Loss of Use coverage.
Here are some other expenses that might not immediately come to mind but would be eligible for Additional Living Expense/Loss of Use coverage:
- Credit check fee charged by management company when renting temporary house.
- Mileage to/from a temporary rental house to/from the various locations you need to visit for rebuild-related business, such as furniture stores, your bank, flooring stores, cabinet makers, fixtures stores, appliance/electronics stores, etc.
- Mileage for increased distance traveled from temporary rental to adult and children’s activities (school/sports/clubs/lessons), or your house of worship.
- Meals eaten when out on rebuild-related business, (visiting construction site, shopping to replace personal property items, researching/purchasing rebuild items).
- Fee charged to set-up new computer system at temporary rental home.
- If your temporary housing has a sewer fee but your home has holding tanks or septic system, the sewer fee is reimbursable, as are any charges incurred to establish a new account or “setup” fees for utilities at temporary rental home.
- Photocopies and mailing expenses related to claim.
- Cost of fencing to secure damaged/destroyed house and/or pool.
- Moving costs incurred to move from the temporary rental home back into the repaired/rebuilt home (moving company; moving van; moving boxes; packing paper and tape).
- Reconnection fees for setting up services (cable/telephone/utility) at the rebuilt home.
- Required carpet cleaning when moving out of rental home.
- Pet boarding cost, or if you have horses or other livestock that need to be relocated, those expenses are also covered.
- Increased veterinary bill for pets for illness/symptoms resulting from the loss event.
You can see how important it is to be very organized and track your expenses so that you can submit them for reimbursement. So keep meticulous records of every expenditure and save all your receipts.
Tip: Get a waterproof, zippered pouch to keep all receipts safely together in one place so they’re at the ready when needed.
Added benefit: If you demonstrate you’re organized and methodical in your ALE/Loss of Use documentation and you present your arguments so that the insurance company can see that you are organized, the insurer will have less ammunition to dispute your claim. And as you might have guessed, there are plenty of apps available for expense tracking, plus you can download our spreadsheet for ALE/Loss of Use expenses.
What’s Not Covered?
Remember, Additional Living Expense/Loss of Use coverage pays for expenses incurred by you that would not have occurred were it not for the fire or other covered peril causing damage to your home. That means you have to continue paying your mortgage as usual—payment is due whether or not you suffered a loss.
Also not allowed under ALE/Loss of Use are claims for lost work hours while dealing with claim-related tasks such as meeting with contractors or shopping for new furniture. Nor should you expect the insurance company to approve exorbitant restaurant receipts If your temporary housing is a furnished home with a well-equipped kitchen.
The key to a seamless Additional Living Expense/Loss of Use claim is to establish your baselines: What did you typically spend on groceries, restaurants, mileage, utilities, etc., before the loss and what do you need to spend now to maintain your household’s standard of living?
Because of the many subtleties and differences between policies, it’s important to understand the coverage you have is limited by time—typically 12 or 24 months—or a monetary amount, typically capped at 15-20 percent of the dwelling coverage amount. You should understand your policy’s limits from the outset.
If you need long-term temporary housing, corporate apartments—fully furnished and equipped dwellings for extended temporary stays—might be a suitable and convenient housing solution. Search online for suitable offerings in your area.
You might be able to get a lump-sum ALE/Loss of Use payment up front. Ask your agent or adjuster about this.
Four Ways to Ensure Maximum Additional Living Expense/Loss of Use Benefits
- Be organized and ready to provide receipts for all your expenses.
- Document how the expenses are an increase from your normal expenses.
- Provide proof of your normal expenses to be used as a comparison point for the insurance company in case they question things.
- Get written authorization for any special expenses from the insurance company to avoid misunderstandings.
Contact Miller Public Adjusters to learn more about how we can help you maximize the amount of your Additional Living Expense/Loss of Use claim settlement and ensure you receive all you’re entitled to under the provisions of your policy. Call us toll-free at 866-625-0747.