Additional Living Expense Insurance
Additional Living Expense Insurance is a type of coverage present on several types of Homeowner’s Insurance that reimburses additional costs caused because of the insured’s claim.
Let’s put it in a scenario so it’s easier to visualize:
Homeowner Sarah has her house trashed because of an Act of God: a hurricane has ravaged her city and the strong winds made a tree fall on her roof and the water damaged her whole kitchen and appliances. She first stayed at a hotel, while the insurance company was figuring out the extent of the damage. When they found out, one week later, that it would take 6 months to rebuild the house, she had to rent a house for her family to go to.
Both the cost of staying at a hotel and the rent of the temporary house are covered by the Additional Living Expense Insurance.
Like the name says, any additional living expense caused by whatever peril that damaged your house is covered by this type of insurance. For instance: if, because of it all, Sarah – who used to take her kids to school walking and spent zero dollars doing that – now needs to drive them there, the gas money is all covered by the additional living expense insurance. If she now spends $100 a month with it, on top of the $50 she used to spend, then she gets $100 from the company and still pays for that $50.
Additional Living Expenses insurance coverage usually provides from 10-20% of the structural coverage of the home and is basically a way of maintaining normalcy in an otherwise chaotic moment. It makes us confident that, should anything happen, it will all be fine and we won’t have to spend more than we used to.
Real Estate tips:
Use The OFFICIAL Real Estate Agent Directory® to connect with a real estate agent capable of guiding you through all types of Home Insurance policies!
Popular Insurance Terms
One-year coverage that is renewable at the end of each year. Since the group plan is subject to experience rating, the premium rate upon renewal is based on such factors as the loss record ...
Bona fide organization that purchases insurance on a group basis on behalf of members. However, a group cannot be formed for the purpose of purchasing insurance since adverse selection ...
In many property insurance policies, a requirement that the insured carry insurance as a percentage of the total monetary value of the insured property. If this percentage is not carried, ...
Amount, not in excess of $10,000 per year, given to each of an unlimited number of donees free of federal estate tax and gift tax. Each individual can give up to $10,000 to any one donee, ...
Financial incentives credited to the policy to encourage the policyowner to keep the policy in force. The incentives may be utilized by: (1) applying them to the policy cash value after a ...
Canadian retirement plan much like U.S. individual retirement account (IRA). Here, an employee can contribute on a tax deductible basis C $3500 each year as a member of an employer pension ...
Transfer of highly individualized loss exposures that is not based on the usual pooling principles of insurance such as risk identification and classification selection. Rather than setting ...
Rules of conduct and commissions paid to agents. For example, under the rules of conduct agents may be required to submit all of their business to only that agency. The contract also lists ...
Provision for coverage for buildings and personal property within the simplified commercial lines portfolio policy (sclp). The buildings and personal property coverage may be classified in ...
Have a question or comment?
We're here to help.