Utility Cost Increases: Managing and Claiming Higher Utility Costs Under Loss of Use / ALE Coverage
When a home becomes unlivable due to damage or required repairs, temporary accommodations may come with utility costs that differ from what you’re used to paying. Increased costs for heating, cooling, electricity, water, or even internet may arise depending on the location and type of your temporary housing. Loss of Use / Additional Living Expenses (ALE) coverage can help offset these increased utility expenses, easing the financial burden during your displacement.
This article explores what ALE covers regarding utility cost increases, how to document and claim these expenses, and tips for managing temporary utility costs.
Why Consider Utility Cost Increases Under Loss of Use / ALE?
Financial Relief: ALE helps cover the difference between your usual utility expenses and any increased costs you incur in temporary housing.
Continuity of Comfort: ALE enables you to maintain a similar standard of living, ensuring that you have reliable heating, cooling, water, and other utilities in your temporary home.
Supporting Essential Needs: ALE ensures that necessary utilities like heating in winter or cooling in summer are covered, helping to maintain comfort and safety.
Types of Utility Cost Increases Covered by ALE
Electricity:
Coverage: ALE can cover increased electricity costs if your temporary housing has higher rates or if the accommodation is less energy-efficient, leading to higher usage.
Considerations: Keep copies of past electricity bills for comparison, as ALE only covers the portion that exceeds your usual monthly expenses.
Examples: If your usual electric bill is $100 per month, but your temporary accommodation increases it to $150, ALE would cover the additional $50.
Water:
Coverage: Water costs can vary depending on the rental property or temporary accommodation. ALE can cover additional water costs if the temporary property requires more water usage or has higher rates.
Considerations: Track your average monthly water costs to determine the increased amount. Documentation showing both usual and new costs will be essential for reimbursement.
Examples: If your water bill typically runs $50, but using a larger rental home raises it to $80, ALE would cover the $30 difference.
Heating and Cooling:
Coverage: Heating and cooling costs can vary significantly depending on the size, age, and efficiency of temporary housing. ALE can help cover increased costs if your temporary accommodation is less energy-efficient.
Considerations: Maintain copies of past heating and cooling bills to support your ALE claim. Weather and seasonality may affect costs, so consider those factors when documenting your expenses.
Examples: If your usual gas bill for heating is $80 per month, but it increases to $130 in your temporary accommodation, ALE would reimburse the additional $50.
Gas and Propane:
Coverage: If your temporary accommodation requires propane or has higher natural gas costs than your home, ALE may cover the added Expense.
Considerations: Provide your insurer with documentation of typical monthly gas expenses to substantiate the increased costs during displacement.
Examples: If you normally spend $40 on gas but temporary accommodations raise the bill to $70, ALE can cover the $30 difference.
Internet and Cable Services:
Coverage: Internet and cable services may not be covered under ALE in all cases. However, some policies include these costs if they are deemed essential for maintaining your standard of living or required for work-related purposes.
Considerations: Confirm with your insurer if internet and cable are eligible for ALE coverage. Documentation showing your regular monthly costs for these services is recommended.
Examples: If your internet plan usually costs $50, but a temporary plan required by your rental property is $75, ALE may cover the $25 increase if it’s approved by your insurer.
Steps to Documenting and Claiming Utility Cost Increases
Review Your Insurance Policy:
Understand ALE Coverage Limits: ALE for utility cost increases usually has specific limits. Confirm with your insurer to understand any caps on individual utilities and which services are eligible.
Check Eligibility for Internet and Cable: Some policies cover internet and cable costs if they are essential to maintaining a comparable standard of living, especially if required for work or medical needs.
Track and Document Your Expenses:
Record Past Utility Bills: Gather records of your typical monthly utility costs for comparison. Many insurers require evidence of the difference to validate ALE claims.
Save Receipts and Bills for New Costs: Keep all bills and receipts for utility costs in your temporary housing on Loti. Provide documentation for the increase from your usual costs using Special Entries.
Submit Claims for Reimbursement:
File Separate Claims for Each Utility: Most insurers prefer individual claims for each type of utility. Submit claims promptly and include supporting documents for faster processing via Loti.
Include Past and New Costs: Document your usual costs alongside the increased expenses for easy comparison using the appropriate Special Entries forms. This allows the insurer to clearly see the cost difference and helps validate the ALE claim.
Additional Tips for Managing Utility Cost Increases During Displacement
Plan for Seasonal Variations: If your displacement extends into different seasons, your utility costs may change. Communicate with your insurer if you anticipate significant variations in heating or cooling expenses.
Reduce Costs Where Possible: Consider ways to reduce utilities, such as using energy-efficient Bulbs or lowering the Thermostat at night. While ALE covers increased costs, minimizing expenses within coverage limits can be beneficial.
Maintain Communication with Your Insurer: Notify your claims adjuster of any changes in your utility expenses or accommodation needs, as this ensures continuous coverage and avoids unexpected expenses.
Loti can help:
In addition to managing receipts, invoices, pictures and more, Loti provides easy ways to organize your living expenses for your insurance claims using our Special Entries area.
Understanding Reimbursement and Next Steps
Submit Detailed Expense Reports: Provide itemized utility bills and past records to your insurer, showing the increase from your usual expenses using Special Entries on Loti.
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.
Plan for Out-of-Pocket Costs: ALE can cover increased utility expenses, but it may not account for all extra costs. Budget for potential out-of-pocket expenses if repairs extend beyond ALE limits.
Wrap-Up
Increased utility costs are a common change when living in temporary accommodations. By understanding your ALE coverage, tracking utility expenses, and maintaining communication with your insurer, you can ensure smooth reimbursement and minimize financial stress during this challenging time.
Whether it’s electricity, water, heating, or internet services, ALE provides essential support to maintain your standard of living while you await your home’s return to livable conditions.