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Understanding Additional Living Expenses

Damage to your home that results in a claim can be extremely disruptive, displacing you and your family for days, weeks, or even months at a time in some cases. Most home insurance claims don’t require that you leave your home while the repairs are being done, but if you have a claim that requires extensive repairs or that leaves parts of your home unsafe, you’ll be glad your home insurance policy has coverage for Additional Living Expenses (ALE).

Most home, condo, and tenants insurance policies provide coverage for alternate accommodations in the event of a covered claim that forces you to leave your home temporarily. Typical expenses might be a hotel room or the cost of eating out because, without access to your home, you’ll need a place to sleep and probably won’t have a way to prepare meals. Without coverage for additional living expenses, these costs would come out of pocket — and they can add up quickly.

You Can Be Displaced Longer Than You Might Think 
In some cases, you might only be inconvenienced for a few days while your home is being repaired. In other cases, the required repairs can take considerably longer, lasting weeks or even months. Imagine if there was a fire at your house or if that old oak behind the house finally fell, coming to rest in the family room. Neither of these claims would be quick to repair. In all likelihood, structural engineers would have to examine your home to ensure its integrity and township inspectors would be involved in the process, adding time to the repairs.

What Triggers ALE? 
ALE can be triggered by a broad range of situations, including prohibited access, such as a mass evacuation, prohibited access due to damage to a neighboring property, and damage to the home itself due to covered perils. The specific details governing additional living expenses can vary by the insurer or by province, so be sure to ask your insurer if you have questions about your coverage.

Additional living expenses coverage is designed to pay for your increased cost of living if you were displaced due to a covered claim. If it would normally cost you $100 per week to feed your family at home but your expense is now $150 due to eating out, ALE would pay the difference of $50. Similarly, new and necessary expenses, such as laundromats or laundry services would be covered.

If you do have a claim that triggers ALE, be sure to keep your receipts to document your expenses. If you have questions about additional living expenses coverage limits, be sure to contact your broker for a policy review.

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