What are additional living expenses?
Additional living expenses (ALE) provide coverage for the cost of living outside of your home while it’s uninhabitable. This coverage typically kicks in after a significant loss and damage to your home by an insured peril.
You’ll receive compensation for expenses such as accommodations and food. You will be reimbursed for expenses that are above and beyond your regular daily living expenses. The coverage will last until you can move back into your home or you reach your policy limit.
How does additional living expenses coverage work?
Additional living expenses (ALE) coverage only activates if you are forced to leave your home after an insured loss claim. Your home has to be determined to be uninhabitable. For example, you do not have water, or electricity, or have significant damage. It does not apply if you have repairs that are an inconvenience to you.
ALE can also apply if you receive a mass evacuation order from your municipality or government. For example, a gas or chemical leak in your neighbourhood or impending natural disasters such as wildfires or flooding.
“Additional” is the keyword when it comes to the expenses that qualify. ALE will cover costs that exceed your regular prices to live. So, it ensures you can keep the same or similar lifestyle you had previously to leaving your home.
Insurers typically reimburse you for the additional expenses you incur. You typically will submit receipts and you’ll receive a payment. You won't have to wait for a lump sum payment once all expenses have been calculated.
In terms of duration, you will receive compensation until you can move back into your home or you reach your policy limits for additional living costs.
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