Life can change in the blink of an eye. That’s one of the reasons having the right insurance coverage is essential.
Over 354,000 home fires happen each year, and no one can ever predict when it will happen to them. Suppose it does, though. What would you do?
If you have additional living expenses coverage on your home insurance policy, you’d be in a lot better shape than if you didn’t.
If you don’t know what this coverage is or don’t think it’s important to have, continue reading to find out why you need it and why you should never go without it.
The Definition of Additional Living Expenses Coverage
Additional living expenses (ALE) is a coverage type that is included in most homeowner’s insurance policies. If not, one can generally add it to their policy as a rider to their plan.
Many people refer to ALE as a loss of use home insurance coverage as it is something you only use if you lose the ability to live in your home.
The purpose of ALE is to compensate you for extra expenses if forced out of your home for a covered peril.
For example, consider what would happen if you had a kitchen fire. Even if the fire didn’t destroy your entire home, it could cause some damage to your house. It could also leave your home full of smoke damage.
You couldn’t stay living in your home after this happened. You’d have to move out while a contractor made the repairs. The problem is that you would have to continue paying the expenses for your house, including your mortgage and utilities.
On top of that, you’d have to pay for a place to live. You’d also have a lot of other extra expenses. To protect yourself from the financial devastation this could lead to, you need ALE coverage.
How It Works
If you experience a fire or any other covered peril, you can file a claim with your homeowner’s insurance. The coverage your policy offers will pay for the costs of repairing your home from the damages.
Your regular policy will probably also compensate you for the loss of your personal items destroyed from the peril.
If you have ALE insurance coverage, you can also file a claim for your extra expenses.
What It Covers
To further understand ALE, you should learn what it covers. The main principle is that it covers extra expenses you encounter from being forced out of your home. Here are some examples of how it works and what it includes:
The Cost of Rent
If you own your home, you will have to continue making the mortgage payments on it. Doing so will not affect your budget, but you will also have to pay rent wherever you stay.
Suppose you find a temporary apartment to rent that costs $800 a month. You would have $800 extra a month to pay because of this, so your ALE coverage would pay this amount because it’s an extra expense.
Increase in Food Costs
ALE will not provide you with coverage for all the food you eat while you are living somewhere else, but it will offer coverage for the increased costs you have.
Suppose you usually spend $200 a week on groceries but are not forced to eat out for every meal. If you now pay $300 a week to eat out, you have an increased cost of $100 a week.
ALE protection will cover the extra $100 you spend per week for as long as you are living away from your home.
It also provides compensation for laundry expenses. If you used to do your laundry at home but now have to do it at a laundromat, you can turn in receipts for these bills. Your ALE coverage will pay you back for them because they are extra fees.
Pet Boarding Fees
Perhaps you have pets that cannot stay in your rental property now. If so, you’ll have to board them, and the fees for pet boarding are also extra costs for you. The ALE protection you have will cover this, too.
Furniture and Furnishings Rental
Additionally, if you rent an apartment and need furniture or home furnishings, you can expect your ALE coverage to pay for these costs, too.
Increased Costs of Utilities
One last thing to know is that you might receive compensation for the increased costs of utilities, too. If the utility bills at your home increase due to the construction work your home needs, your ALE coverage will pay the difference in costs.
It May Cover Other Things
You can talk to an insurance agent if you’d like to know about other things that additional living expenses insurance covers.
The Risks of Going Without It
Hopefully, you can see how beneficial it is to have ALE coverage. I mean, you have a lot to lose if you live without it.
Imagine dealing with a fire in your home and being forced out. Coping with a nightmare like this is challenging on its own. Imagine, though, facing a lot of extra expenses, too.
A smart step to take is getting an annual insurance review. If you review your policy each year, you can make sure you have every essential type of coverage you need, including additional living expense protection.
How to Purchase It
Are you convinced that you should have additional living expenses coverage on your homeowner’s policy? If so, don’t wait another minute.
Waiting to add this necessary coverage could leave you in a huge bind.
If you would like a free homeowner’s insurance quote that includes ALE coverage, contact Kicker Insures Me Agency at (281) 487-9686. We’d love to talk to you about your home and needs to make sure you have all the protection you need.