Understanding Insurance Adjustments

Do You Need Additional Living Expense Coverage With Your Homeowner's Insurance?

One of the common types of coverages included with many homeowner's insurance plans is something called additional living expense coverage, or ALE. If your policy includes this, it may be important for you to understand what it is. If it does not include it, you may want to learn more about it to decide if you should add it to your home insurance policy or not.

The purpose

ALE coverage has one key purpose, which is to provide reimbursement to you if you are ever in a situation where you cannot live in your house due to a covered peril. For example, say that your house is smoke damaged due to a kitchen fire and you must move out for a month while the contractors treat the home and make repairs. The ALE coverage on your policy will provide you with compensation to reimburse you for the extra expenses you have. After all, you would still have to continue paying your mortgage payment and all other expenses for your house, but you would also have to pay to stay somewhere during this month. If you did not have this coverage, you would have to pay the extra expenses entirely out of your own checkbook.

The types of things it covers

ALE covers numerous different things related to experiencing a loss that forces you to move out of your home. The first thing is the cost of living somewhere else. If you have to stay in a hotel, it will pay your bill. If you have to rent an apartment or a house to stay in, it will cover this too.

Secondly, it may cover essentials you need to buy, such as a toothbrush and deodorant. If you suddenly have nothing to your name, this insurance might kick in to cover these types of basics.

It will also generally cover food, but it will only cover the difference between what you have to spend while living away from your home and what you would normally spend if you were in your home.

Why you should add it

If you do not currently have ALE included with your homeowner's insurance, you should add it right away. You never know when a major peril will occur, and that is why you have home insurance in the first place. If such a major peril does occur, this will protect you even more.

There are a variety of different types of coverages you may want to add to your existing policy, and this is just one. You can find out about others by talking to a home insurance agent.