[Thu, June 27, 2013] In a recent (February 2013) FAPIA 2013 HURRICANE SEASON TIP # 18 – Additional Living Expense is explained for all property owners. What is it and how is it calculated?

The residential insurance policy coverage known “Additional Living Expense” (ALE) provides reimbursement for expenses that you incur as a result of a covered peril that are over and above your normal living expenses. Business owner policies can carry "business interruption" coverage (more on that next week).

For example; Your home succumbs to fire or catastrophic hurricane damages. You have to rent a place to stay (ALE) while your home is being re-built. You still have to pay your mortgage, But you also have to pay an additional amount of $$ to rent the place to stay (ALE) . In addition, the place you’re renting doesn’t allow pets, and you have a family dog that nobody can take care of for you. You have to incur kennel charges (ALE) that you would not otherwise incur. You had to stay at a hotel for 10 days (ALE) and eat out (ALE) while you were looking for a more permanent place to stay. Keep your receipts because any amount OVER your normal food expenditure is considered ALE and is reimbursable. Finally, the catastrophic damages in your area were so bad that you had to find a home to rent that is 50 miles away from home/work and you are incurring additional gas and mileage expenses to travel to and from your home to check on it (ALE). Keep receipts. Some of your furniture was not damaged but needs to be stored at a facility (ALE) during the rebuilding of your home.

ALE is an “as incurred” expense – meaning that you have to actually incur and document the expense to trigger a payment from the insurance company. Your public adjuster can help you document these money damages to make sure you receive all the compensation you are entitled to. Check your insurance policy today. Do you know how much ALE coverage you have? Think about having to spend an entire year outside of your home. Do you have enough coverage to reimburse you for those additional living expenses for one year? If you don’t, you should speak to your agent about increasing your limits. This is one of those types of coverage you don’t want to find out you didn’t have enough of – AFTER you suffer a loss. By then, it’ll be too late.

Please share this important HURRICANE SEASON TIP brought to you by the Florida Association of Public Insurance Adjusters. If you have any questions about ALE, your property damage or an insurance claim, please contact me.