Additional Living Expense Insurance


Definition of "Additional living expense insurance"

Neolfi Hentze real estate agent
Neolfi Hentze, Real Estate Agent Heritage International Realty

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.

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