ALE Coverage: Understanding Coverage of Additional Living Expenses

bigstock-Green-Calcalator-With-Dollars-259026Nope, we’re not talking beer here. Although a good craft beer can cost you more than your average “cold one” it’s not exactly in need of its very own policy.

A.L.E. stands for Additional Living Expenses. A coverage that is included in most homeowners policies, protecting the policy holder in the case of temporary displacement. ALE coverage reimburses the policy holder for a percentage of additional expenses like shelter, food and other daily expenses. The percentage is usually from 10 – 20%, but you might want to think of increasing this percentage for better coverage in case of an unfortunate situation.

Like many things, this might not be something you think about until after the fact, which is why we’re bringing it to your attention now! We suggest you speak with your insurance agent and find out exactly what your ALE limit is. If it’s low, consider increasing it.

Take into consideration the amount it would cost to increase your ALE in comparison to how many additional expenses you’d incur if you had to leave your home for a prolonged period of time. Include things like furniture storage fees, additional travel expenses, food, motel costs or a short term rental home and so on. Remember we’re talking ADDITIONAL expenses. So, speaking in simple terms, if you usually spend $100 on food each week but then need to order take out or eat out for the first week after displacement making your weekly food expenses $300, you’ll want that extra $200 covered.

We hope this is something you’ll never have to do, but we’re here to help you for the worst case scenario… that being said be sure to keep clear documentation of all incurred fees from parking fees to rental fees.

Similarly to Business Interruption Insurance, one can only be covered by ALE if the catastrophe that displaces the policy holder is covered. So for example if you have coverage for flooding and your home is flooded then you’re probably covered for a percentage of the additional living expenses that incur, but if you’re not then… well then you’re looking at a potential costly repair as well as costly additional bills.

Get informed and stay informed. And as always, call us if you have any additional questions!