The True Meaning of Additional Living Expenses

December 4th, 2008 by Brad C

Recent fires have forced hundreds of California residents from their homes, and suddenly the Additional Living Expenses portion of home insurance policies has Satellite Images Capture California Wildfires become very important.  Since every homeowner faces the possibility of being forced to live away from home due to fire or other damage, it is a good idea to know just what “Additional Living Expenses” means.

What is Covered by Additional Living Expense?

When a policy says it includes only “Additional Living Expense,” that covers those additional costs incurred by the homeowner to maintain the “normal” standard of living if the home is uninhabitable.  It covers things like staying at a hotel, boarding pets, and eating at restaurants.  This does not cover mortgage payments, does not pay normal food bills, etc.

The key word is “normal.”  The purpose of insurance is to keep life the same, not improve it, so homeowners will get just enough to maintain status quo while living away from home.

One important exception to eligibility for Additional Living Expense coverage is whether the home actually sustained damage.  If a homeowner was forced to evacuate because of danger in the area, but nothing actually happens to the home, Additional Living Expense coverage does not apply.  That means the home owner must pay all expenses from his own pocket, unless “Loss of Use” coverage was also purchased.

Listen to The True Meaning of Additional Living Expenses
Listen to The True Meaning of Additional Living Expenses

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