Homeowners insurance basics: Additional living expenses

Every homeowners insurance policy includes additional living expenses coverage. If you’re temporarily displaced from your home because of damage, this coverage can help you pay for the additional everyday expenses until you’re able to move back in. But what exactly does additional living expense (ALE) coverage include?

Here is a basic guide to help you learn more about ALE insurance:

What does ALE coverage include?

Additional living expenses covered by your home insurance generally include:

• Restaurant and food costs exceeding normal grocery bills.
• Temporary lodging including hotels, motels and rentals.
• Fuel and transportation costs for an increased commute.
• Pet boarding if your temporary lodging doesn’t allow them.
• Furniture rental if your temporary lodging is unfurnished.
• Laundry services.
• Storage fees for your personal belongings.

What isn’t covered?

Unfortunately, your ALE insurance won’t cover everything. It’s important to remember that this portion of your insurance policy will not pay for damage to your home or belongings. However, these costs are covered by the dwelling portion of your homeowners insurance policy.

How much ALE coverage do I need?

Your insurance company may offer options for different amounts of coverage for additional living expenses. By default, this benefit is about 10% to 20% of the amount covered by your dwelling coverage.

For example, if your home is damaged and your dwelling coverage is $400,000, your ALE policy would provide around $40,000 to $80,000 of coverage for your additional living expenses.

For any questions about coverage amounts and details of your additional living expense coverage, check with your insurance company for more information. The more you know about your coverage, the better prepared you’ll be if you ever need to make a claim.