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Updated Aug. 30, 2024
Additional Living Expenses coverage is insurance that covers the costs of living elsewhere if you are unable to live in your home. This usually occurs when your home or apartment is uninhabitable after some form of accident and your home needs repair. The coverage lasts until your home is repaired or until the policy limit has been reached.
ALE claims can only be made if you are leaving your home specifically be. Coverage will not be granted if you are leaving due to inconvenience from other repairs. Lack of running water or electricity, for example, can make your home uninhabitable and would be considered grounds for ALE coverage.
Other reasons when additional living expenses coverage is triggered might be if a civil authority orders a mass evacuation, if access to your home is prohibited due to damages to a neighbour’s premises, and a recommendation was given not to return to your home for medical or health reasons.
Examples of this are things like natural disasters (earthquakes, wildfires, flooding chemical leaks etc.)
ALE coverage pays for expenses that are above and beyond your “normal” costs at home. It is meant to reimburse you for the extra costs to maintain the lifestyle you had before. Often, insurance companies will reimburse you by cheque as you incur them, so you don’t have to wait for a lump sum payment.
ALE was created to help claimants maintain their lifestyles when needed, not to help improve it.
In many cases, total ALE coverage limits are 20% to 30% of the replacement cost coverage on your home policy. So, for example, if your home is valued in your policy as $500,000, the maximum ALE coverage would be $100,000 to $150,000.
Typically, there is a ceiling on coverage represented by a percentage of your home’s value as listed in your policy.
Insurance companies will allow an increase in coverage limits for an additional premium
Typically, yes. Most comprehensive policies include it. ALE insurance refers to coverage under a homeowner’s, condominium owner’s or renter’s insurance policy.
No. ALE coverage is meant to maintain your lifestyle while your home is being repaired and is meant as a temporary stopgap while you incur out of pocket expenses during a set amount of time.
The terms are used interchangeably but they are not exactly the same. Loss of use coverage is a standard protection in a homeowners insurance policy. Additional living expenses coverage is part of that loss of use. For example, loss of use coverage would be for a hotel stay if you are ordered out of your house because that is an additional expense you would incur. But something like mortgage payments, which are not additional expenses, would not be paid if you needed to leave your house.
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