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Consumer Insight

May 5, 2022

What You Should Know About Homeowners Claims and Additional Living Expenses

If you can’t stay in your home after a covered disaster, many homeowners policies will pay for additional lodging expenses. For example, if you move into a hotel or apartment while your home is being repaired or rebuilt, the insurance company may pay your temporary housing costs. These are known as additional living expenses (ALE).  

What types of expenses does ALE cover?  

ALE will help pay expenses that are beyond your normal expenses, because you can’t live in your home. The insurance company will not pay all your living expenses. It will only pay the difference between your previous living expenses and your new temporary expenses.

For example, while ALE coverage may pay your expenses for hotel lodging, you will still be responsible for your mortgage payment. 

 ALE typically covers:  

  • Hotel bills. 

  • Reasonable restaurant meals (if you’re staying in a hotel room with no kitchen). 

  • Other living costs above and beyond your normal housing expenses while you can’t live in your home because of damage. 

You need to be sure you keep all receipts for any additional costs you have. The insurance company will need the receipts to reimburse you.  

What are the limits?  

Some policies have a dollar limit; some may also have a time limitation. These limits are separate from any coverage you receive to rebuild or repair your home and replace your belongings. Ask your insurance agent, company, or adjuster what your policy covers and about any time or dollar limits that apply.  

About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.