Homeowners Insurance helps provide financial protection for your home and personal belongings. There are typically four basic categories of coverage which are as follows:
One of the basic coverages of a homeowners insurance policy is dwelling protection, which helps cover the structure of the home in which you live (e.g. the house’s foundation, walls and roof). Dwelling protection may also help cover other structures that are attached to the home, such as a garage or a deck, against certain risks.
Most homeowners insurance policies also include coverage for other structures that are on your property but separate from your home, like a detached garage, tool shed or fence.
Homeowners insurance doesn’t just help cover damage to your home. It may also provide coverage for the personal belongings you keep within it. Suppose your electronics are stolen from your home or your furniture is damaged by a fire. Personal property protection may help pay to repair or replace your belongings if they are damaged or destroyed by a covered risk. Many insurers offer optional coverages that may further help protect the stuff you own. For instance, you may be able to purchase extended coverage for items such as jewelry, watches and furs that have values above your personal property coverage limits.
This covers additional costs incurred if a homeowner is displaced and must pay out of pocket as a result. ALE coverage is included in most homeowners or renter’s insurance policies. This covers expenses such as food and staying at a hotel until the primary dwelling is inhabitable and is NOT subject to a deductible.
Now let’s discuss Additional Living Expense (ALE) coverage in greater detail. If your home becomes unlivable due to a covered loss, your homeowner’s insurance covers the reasonable and necessary increase in living expense that you incur to maintain your normal standard of living. The amount of coverage available to you for ALE is stated under Coverage D in your declarations page. Here are two examples:
Example 1
Bob and Mary own a home. One stormy night, a large tree falls on their home, damaging the roof. Due to the damage, they cannot stay in the home for three nights.
Bob and Mary spend three nights in a motel room at $100 per night. They take their Great Dane to the kennel at $25 per day. They spend $50 per day for food while out of the home. They normally spend an average of $600 per month on food.
Bob and Mary’s policy cover their ALE while they cannot stay in their home. They are owed:
$300.00 (motel)
+$75.00 (kennel)
+150.00 (food cost)
-$59.16 (normal food cost*)
$465.84 (owed to Bob & Mary)
*ALE is calculated on a per day basis. If Bob and Mary spent $600 per month on food, their daily cost would be $600 for 12 months+ 365 days $19.72 per day. In this example, $19.72 x 3 days = $59.16.
Example 2
A fire strikes Lisa’s home. Due to the damages, she cannot stay there while the home is being repaired, which is expected to take two months.
Lisa locates temporary housing for $1,000 per month; it includes cooking facilities, so she has no additional food expense.
Lisa’s normal home electric bill is $150; however, the electric bill is reduced to $50 per month because less electricity is being used while the home is repaired.
Lisa’s policy covers her ALE while she cannot stay in her home. Her expenses for the two months are:
$2,000.00 (temporary housing)
+$100.00 (electricity cost)
-$300.00 (normal electricity cost)
$1,800.00 (owed to Lisa)
Here are some common items that may be claimed under Additional Living Expense coverage:
What is covered is the increased food cost that you incur while you are without cooking facilities. You will need to save your receipts for all food expenses you incur during the repair period. If your home was unlivable for an extended period of time, you may need to arrange for temporary lodging with cooking facilities, which would enable you to resume your normal standard of living.
Temporary lodging (hotel, apartment, rental home, travel trailer, mobile home or other temporary housing) to accommodate you and your family members who were normally residing in your household at the time of loss may be necessary depending on the damage sustained to your property.
The amount of increased utility costs incurred while your home is unlivable is covered.
The increased mileage you incur as a result of moving to temporary lodging may also be claimed. Be sure you discuss this with your adjuster.
Replacement of contents, temporary repairs to your home and entertainment expenses or other incidental costs incurred while staying in temporary housing is not covered under ALE. Please discuss any questions you might have in regards to ALE coverage prior to incurring expenses to avoid any unnecessary out of pocket expenses.
Los ejemplos y la perspectiva de este artículo son la opinión de Claim Ally. Claim Ally no ejerce la abogacía ni brinda asesoramiento legal.
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