Chapter Overview: Expense Changes Covered by ALE / Loss of Use When a Home is Unlivable

When an insurance Claim forces you out of your home due to unlivable conditions, Additional Living Expenses (ALE) coverage is designed to offset the increased costs you incur during this temporary relocation. ALE can cover various expense changes beyond the costs of housing alone, ensuring that you can maintain your standard of living as much as possible while you await repairs.

This chapter explores expense changes (besides housing) that may be covered under ALE, including Utility Cost Increases, Food, Laundry, Household & Postal Services, and Travel, Parking & Transit Expenses.

Why Consider Expense Changes Under ALE?

Financial Relief: ALE reduces out-of-pocket expenses by covering reasonable increases in your usual costs of living while you're in temporary housing.
Consistent Lifestyle: ALE helps you maintain a similar standard of living by covering costs associated with utilities, food, and other essential services.
Support for Necessary Adjustments: Coverage may extend to extra expenses you incur for laundry, transit, or even household services, depending on the situation.

Steps to Documenting and Claiming ALE for Expense Changes

Review Your Insurance Policy:
- Understand ALE Coverage Limits: ALE often includes specific limits on each category of expenses. Review your policy to know what is covered and any daily, weekly, or monthly caps.
- Confirm Eligible Expenses: Discuss the scope of ALE with your claims adjuster. Not all costs are covered, so understanding which expenses qualify is essential.
Track and Document All Expenses:
- Keep Receipts: Retain receipts and documentation on Loti for any increased costs you incur, including utility bills, meal receipts, laundromat fees, and parking expenses. Insurers require detailed records for reimbursement.
- Log Your Regular Expenses: Keep a record of your typical household costs alongside the increased expenses. Many insurers use this information to validate your ALE claims.
Submit Claims Promptly:
- File Claims Separately by Expense Type: Most insurers prefer individual claims for each category of expenses, such as utilities, food, or travel. Submit claims through Loti as soon as possible, as processing may take time.
- Provide Supporting Documentation: Submit receipts and documents showing your usual costs for utilities, food, and other services. This information helps insurers calculate the reimbursable amount.

Additional Tips for Managing Expense Changes During Displacement

Estimate Anticipated Costs: As soon as you relocate, estimate potential extra expenses for utilities, food, and travel. This helps you budget for any out-of-pocket costs beyond ALE limits.
Plan for Extended Displacement: If repairs take longer than expected, adjust your expense tracking and communicate with your insurer about extending ALE coverage.
Be Reasonable: Opt for temporary accommodations with kitchens to reduce dining costs or use laundromats if hotel services are costlier.
Maintain Open Communication with Your Insurer: Notify your claims adjuster if your costs increase or your accommodation needs change. This ensures continuous coverage and avoids unexpected expenses.

Types of Expense Changes Covered by ALE

The following articles provide guidance on how to navigate temporary living expense changes beyond housing:

Utility Cost Increases

Coverage: ALE can cover the increase in utility costs when temporary housing results in higher bills for electricity, water, gas, or heating.
Considerations: Document your typical monthly utility costs to compare with those in your temporary accommodation. ALE only covers the difference from your usual expenses, so it’s essential to have detailed records.
Examples: If your temporary housing requires you to use more heating during winter or has higher water costs, ALE would cover the additional expenses beyond your typical utility bills.

Food

Coverage: When temporary accommodations lack cooking facilities, ALE can cover the increased cost of dining out or ordering meals. This coverage is intended to cover the difference between your usual grocery expenses and the added cost of eating out.
Considerations: Save all receipts for meals, as your insurer will require them to validate your claim. ALE typically only covers the portion of food costs that exceed your regular grocery expenses.
Examples: If your monthly grocery budget is usually $500 but eating out during displacement increases it to $800, ALE would cover the additional $300.

Laundry, Household & Postal Services

Coverage: ALE may cover laundry expenses if you don’t have access to a washer and dryer, as well as household supplies or services related to your displacement. Postal services, such as forwarding or redirecting mail, may also be covered if necessary.
Considerations: Keep receipts for laundromat fees, dry cleaning, and postal services. ALE coverage typically applies to costs that arise specifically from not having these amenities at home.
Examples: If you need to use a laundromat or pay for a temporary mailbox rental, ALE can cover these extra costs.

Travel, Parking & Transit Expenses

Coverage: If temporary housing results in a longer commute or requires you to use alternative transportation, ALE may cover the additional travel costs, including fuel, public transit, or parking fees.
Considerations: Document your usual commuting expenses for comparison. ALE only covers the added cost beyond what you typically spend, so it’s essential to provide receipts and detailed records.
Examples: If your commute increases by $100 per month due to your temporary location, ALE will cover this difference from your regular commuting expenses.

Summary of Considerations

Submit Detailed Reports: Provide itemized receipts and supporting documentation to your insurer, showing both your usual and increased expenses.
Monitor Your Claims: Keep in regular contact with your insurance provider to track the status of ALE claims. Many insurers assign representatives to assist with ALE claims and provide guidance.
Prepare for Additional Costs: While ALE can cover increased expenses, it may not account for all extra costs. Budget for potential out-of-pocket expenses if repairs extend beyond ALE limits.

Learn More

Expense changes covered by ALE help displaced homeowners manage the additional costs that arise from temporary living arrangements. By understanding your policy, tracking expenses, and communicating with your insurer, you can ensure smooth reimbursement and financial support during this challenging time.

This chapter will explore each major expense category in greater detail, providing tips in the event of an insurance claim.