Are you living in a natural disaster-prone area? If so, it’s important to understand the importance of additional living expenses (ALE) coverage. In recent years, Texas has topped the list as the state with the most natural disasters, experiencing a variety of hazards such as earthquakes, floods, tornadoes, wildfires, and hurricanes. California also ranks high on the list, with susceptibility to floods, hurricanes, heat waves, wildfires, mudslides, and earthquakes. Even Florida has experienced over 120 natural disasters since 1953, with hurricanes being the primary type of storm. In fact, Florida was most recently hit by hurricanes Ian and Nicole.

ALE coverage, which is typically included in most homeowner’s policies, is intended to cover the reimbursement of expenses associated with living while your house is not habitable. These expenses can include rent, restaurant meals, storage fees, transportation, and replacement clothing. However, it’s important to note that standard home insurance doesn’t cover damage from floods and therefore does not provide ALE coverage. Additionally, flood insurance policies through the National Flood Insurance Program also do not include ALE coverage.

In this blog, we will discuss the importance of ALE coverage for those living in natural disaster-prone areas and provide an in-depth look at what expenses qualify for reimbursement. We’ll also touch on the rules surrounding reimbursement qualification and included disasters to help ensure you have the coverage you need in case of an emergency. So, if you live in a natural disaster-prone area, it is highly recommended that you invest in ALE coverage.

How additional living expenses (ALE) coverage works

This type of coverage within your homeowner’s insurance policy can really come in handy, but it is important to understand how the coverage works so that you are not caught unaware. Suppose, for example, a hurricane leaves a policyholder’s home uninhabitable, and the homeowner must relocate for a few months while it is repaired. ALE coverage may help pay for costs that are more than typical living expenses, such as hotel bills, apartment rentals, or restaurant meals, while the home cannot be lived in.

Some of the other activities or items provided for under ALE coverage may include:

• If your laundry has to be sent out because you don’t have access to a washer and dryer at your rental home or hotel, then the costs at a laundromat may be covered.
• Fee for credit checks charged by the management of your temporary rental property.
• Furniture (in the event you had to rent an apartment or condo that was unfurnished).
• Costs to rent special items you are usually used to having may be covered and considered.
• You may be able to get coverage for the cost of storage.
• Meals eaten when driving back and forth for rebuild-related business.
• An insurance policy taken out on the contents in a temporary rental house.
• Moving or displacement costs.
• Reconnection fees for setting up services (cable/telephone/utility) at the rebuilt home.
• Pet boarding.
• Sewer fee if you didn’t have one for your home.
• Mailing expenses and photocopies related to your claim.
• Internet/utility/cable connection setup fees.
• Mileage to and from a rental home and to and from all locations visited for rebuild-related business.

What doesn’t ALE cover?

Although the costs listed above may be covered by ALE, it is normal to expect an assessment on how claimed costs compare to the normal costs of your lifestyle. Remember that additional living expense coverage is designed to pay the difference between your normal expenses and what you have to pay now that you cannot be in your home.

ALE does not cover, on the other hand, damage to your home or belongings. That said, those items should be covered by your homeowner’s insurance. The dwelling coverage in a homeowner’s insurance policy may help pay to repair physical damage to your home caused by a covered peril, like a hurricane. Personal property coverage, which is a common part of most homeowner’s or renter’s insurance policies, may help cover the cost to replace or repair belongings that were damaged by the natural disaster. However, this is why it is so important that you do a regular review of your homeowner’s policy to ensure that you have the right amount of coverage. Even basic home improvements can occasionally add value to your home, which means you may want to raise the coverage too.

What makes your home uninhabitable?

Will insurance pay for me to live somewhere else?

The key to a seamless ALE claim is to establish your baselines, including identifying what you typically spend on groceries, utilities, etc., before the loss and what you anticipate you will need to spend to maintain your household’s standard of living in the temporary living situation.

Because of the differences between varying ALE policies, it’s vital that you understand the coverage you have is limited by time or a monetary amount. Make sure that you understand your ALE policy’s limits from the outset. If you determine that you need a long-term temporary housing solution, you may find that corporate apartments are suitable and convenient.

To ensure you maximize the ALE payment due to you, consider the following:

• Be ready to provide receipts for all your expenses.
• Document how the expenses are an increase from your normal expenses.
• Provide proof of your everyday expenses. This can be used as a comparison point for the insurance company in case your receipts are questioned.
• Check with the insurance company and obtain written authorization for any special expenses to avoid misunderstandings.

Will your insurance pay out?

In general, most standard homeowners insurance policies include a provision for additional living expenses (ALE) in the event that your home becomes uninhabitable due to a covered loss. This coverage can help pay for things like hotel stays, meals, and other expenses related to living elsewhere while your home is being repaired or rebuilt. However, it’s important to note that this coverage typically has limits and exclusions, so it’s essential to understand the specific terms and conditions of your policy.

One key thing to keep in mind is that ALE coverage is only available if a covered peril, such as a fire or natural disaster causes damage to your home. If the damage is caused by something not covered by your policy, such as a flood or earthquake, you may not be able to claim ALE. Additionally, most policies have a time limit for ALE coverage, usually around 12 months, after which you would be responsible for paying for your own living expenses.

Another thing to consider is that even if you do have ALE coverage, you may not be able to live in a home that is as nice or as expensive as your own. In most cases, the coverage will only pay for a home that is comparable in value to your own, and you will be responsible for any additional costs.

If you’ve got home damage as a result of a storm and you’re displaced because of it, reach out to Bulldog Adjusters to find out how we can help you handle the hassle of your home insurance company. Here at Bulldog Adjusters, we work our hardest to make sure that you get the largest possible settlement from your insurance company!