Additional Living Expense

For the fire victims

What now

If you were one of the unfortunate ones to have experienced fire damage to your home and property, you are not alone.

Cal Fire reports the following for structure damage in 2024:

1,680 Structures Destroyed

397 Structures Damaged

2,077 Total

To meet the outstanding needs of the insured, Additional Living Expense Coverage or Loss of Use was developed to help in finding immediate and long-term living assistance while the repair process is going on at your home.

What does Additional Living Expense Cover?

Additional Living Expense, or (ALE), can also be identified as Loss of Use and is usually listed as Coverage D on your Homeowners Policy Form. One important point about Loss of Use Coverage is that it is subject to a policy limitation of 20% of the total amount specified for Coverage A Dwelling. If you have $200,000 coverage for your Dwelling you would be eligible for at least $40,000 coverage for Additional Living Expense assistance for a covered cause of loss.

Additional means Over and Above

Additional Living Expense will pay the necessary additional amounts incurred for living expenses to enable you to maintain your normal standard of living because of a covered cause of loss. The following is a selection of what would be covered:

A.) Additional amount of funds required to pay your temporary rental expense which would be over and above your normal mortgage payment. If your normal mortgage payment was $2,000 per month and the temporary rental charge was $2,500, a $500 total would be paid for Additional Living Expense.

B.) If additional mileage was incurred, reimbursement for this expense would be paid upon an agreed amount.

C.) Additional Living Expense could also be used for the additional cost for food which may be incurred.

D.) Your pet may need to be boarded during the repair of your home; it is also covered.

Agents that find you temporary homes

Once it is established that your home is not livable due to a covered cause of loss, your insurance adjuster may refer you to a potential rental for you to occupy during the repair of your home.

In addition, the adjuster may refer a company to you that specializes in finding homes for insureds that are temporarily displaced. These companies will take several things into consideration such as finding a centralized location for you to rent which would be close to employment and schools. One issue that is very important will be the rent being charged and the amount of coverage your policy provides, as well as the anticipated repair time involved.

Additional Living Expense Extension

In catastrophic situations, such as the wildfires that have struck California and other states, you may find that you will need to wait several months before repair can begin because of txhe shortage in qualified General Contractors plus the time taken to complete the work. It may be possible for your insurance carrier to increase your Coverage D to meet the additional need.

Respectfully,

Norman Lambe