Additional Living Expenses
November 8, 2022
Table of Contents
What is an Assignment of Benefits?
How Does an Assignment of Benefits Work in Practice?
Are There any Downsides to Signing an Assignment of Benefits?
Do I have to sign an Assignment of Benefits?
Are There any Benefits to Signing an Assignment of Benefits?
Can my insurance policy restrict the use of AOBs?
Data
Do I have any rights or protections concerning Assignments of Benefits?
What is Additional Living Expense Coverage?
Most Homeowner's and renters insurance policies cover expenses you incur because damage to your home has made it temporarily uninhabitable. This coverage is often referred to as additional living expenses (ALE) or loss of use. ALE intended to help homeowners and renters rebuild or repair their homes after a disaster or other event that makes the property uninhabitable.
What does ALE Cover?
ALE covers the costs of maintaining your standard of living while your home is being repaired or rebuilt, including hotel stays, restaurant meals, boarding for pets, storage fees, and any other expenses that exceed your normal living expenses. In addition to covering these costs directly, ALE may also reimburse you for any rental income that you would have earned if a tenant had been able to continue living in the property during the repairs.
Limits on Coverage
Most policies have a limit on the amount they will reimburse you for, which is typically a percentage of the total coverage on your home. For example, if you have a policy that covers $250,000 worth of damage to your home and it includes ALE coverage of 20%, your insurer would reimburse you up to $50,000 for additional living expenses. To understand your policy limits for ALE, look for the "Coverage D" limit on your declaration page. It's important to know the limit on your policy so you can make informed decisions about where you'll stay and how long you'll stay there if your home is uninhabitable.
There are also usually time limits on this coverage. For example, your insurer may only reimburse you for up to 12 months of living expenses. This is why it's important to keep track of all your expenses related to your temporary living situation so you can submit them to your insurer in a timely manner.
Documenting Your Expenses
Documenting travel and lodging expenses for insurance reimbursement can seem like a daunting task, but it's important to keep track of all your expenses in case you need to file a claim. Here are a few tips to help you document your expenses:
• Keep all receipts for travel and lodging expenses, including airfare, hotel bills, and rental car receipts.
• If you have to evacuate your home due to a natural disaster, keep track of additional living expenses such as food, laundry, and dry cleaning.
• Take photos of any damage to your property.
• Make sure to keep copies of all paperwork related to your insurance claim.
Need help keeping track of these expense? Try Claimly, the free app that streamlines expense gathering and packages electronically for your insurer, so you can get reimbursed quickly and fairly.
Getting Reimbursed for ALE
One of the helpful parts of ALE is that because it’s a separate coverage under your insurance policy, insurance companies often pay it out separately than they pay reimbursements for repairs or loss of personal belongings. This means you don’t have to wait until you’ve accumulated all of your ALE expenses – you can (and should) file for ALE reimbursement early and often. The key to reimbursement, as we’ve said before, is to be able to prove to your expenses to your insurer, and you can’t do that unless you’ve documented your receipts and can send them (electronically) to your insurer.
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