Additional Living Expense Coverage
The unthinkable happens - a faulty electrical connection causes a fire in your kitchen. While the fire is isolated to the kitchen, there is smoke damage throughout the house that makes it unlivable. There is an often overlooked coverage in your homeowners policy that can help you out in this situation.
Additional Living Expense (ALE) coverage is an automatic part of your homeowners coverage. The coverage limit is usually about 20 percent to 30 percent of the limit you carry on the house structure. So, if your house is insured for $100,000, you would probably have at least a $20,000 limit for additional living expense.
The key to understanding this coverage is the term "additional". ALE coverage pays for expenses that you wouldn't have if not for your insurance claim. If your meal expenses are higher than your grocery expenses were before the loss, this coverage will pay you the difference. The goal of this coverage is to keep you in the same financial condition as before the loss. The coverage pays for temporary living expenses such as living facilities, meals, moving expenses, and temporary rentals.