Claims Additional Living Cost (ALE)
Here’s a SUPER Important A.L.E. TIP!
Wildfires have caused massive damage to the Western United States over the last few years. They have displaced tens and thousands of people and cost billions of dollars. What happens when local authorities make you evaluate when fire is too close to your home?
The ALE section of the policy provides coverage! I can assure you that insurance companies do not run radio or TV commercials informing policyholders about this coverage.
Here is a quote directly from the ISO homeowners policy.
“If a civil authority bans you from using the “residence premises” due to direct damage to neighboring properties by a Peril Insuranceed Against, we cover the Additional Living Cost and Fair Rental Value loss for no more than 2 weeks. (1)
ALE coverage is usually listed under Coverage D on a Homeowner policy.
You might not realize that Additional Living Expense (ALE), coverage is what it really is. ALE coverage pays if you suffer a covered loss that renders your home unfit for living.
Most likely, your policy reads like this: “Additional living expense” means any additional living expenses that you incur to ensure your household maintains its normal standard.
ALE covers:
a. A. Temporary housing. This could be in an apartment, hotel or rental house. You shouldn’t expect your insurance company to cover the most luxurious hotel rooms if you live in a small home. However, if your home was expensive, expect the insurance company to pay for comparable temporary accommodation. You will still need to make the mortgage payment if your home has a mortgage. The loss can be severe, and adjusters will know that you’ll need to move out of your home for several weeks or even months. Your insurance company can save you money by placing your family in a hotel for extended stays, as well as in short-term apartments or houses on lease. The insurance company will pay you advances for Contents. If you live in an apartment or house, you can store your new contents like furniture and clothing.
b. Dry cleaning and laundry. Laundry and dry cleaning will be more expensive if you have laundry facilities. You are covered for any additional cost.
c. Meals. Many people missunderstand this claim. You will pay more for food if you can’t buy or prepare your own meals. Insurance companies will not usually cover expensive steak dinners or high-end bar tabs. It’s important to be able explain the reasons for your meals. It will be necessary to estimate how much your family spends on food each month. This can include meals at restaurants that you usually buy. Remember that ALE means you are paying for items above your standard of living. You should keep detailed records of all food purchases. The insurance company will stop paying for extra meals if they place you in a temporary apartment, efficiency hotel or other accommodation that includes a kitchen.
d. Pet boarding costs. You must have someone take care of your pet while you are not able to live there. This is covered.
e. Higher transportation costs for all of your vehicles. Are you required to drive your children to school if your temporary accommodation is not within the school district? That’s covered. Are you required to drive further to get to work? Covered. Are you able to drive further to see doctors, dentists, or to ballet classes, soccer games, and so on? It is covered. Did I mention KEEP METICULOUS REPORTS? For a few dollars, most office supply stores sell automobile expense logbooks. Stop by your local office supply store and get one for every car you own. Make sure to note EVERY TRIP. Keep track of every dollar you spend on transportation.
F. Furniture rental to temporarily reside. Chairs, beds, and other items are required. Even pots and pans and dishes will not suffice. If you have a 27-inch color TV at home, don’t ask them to rent a 60 inch flat screen plasma TV.
g. Storage and relocation costs. Perhaps your personal property wasn’t damaged. Some of your personal property may have been damaged. The restoration contractor will clean and repair it. It must be stored until it can be moved back to its original location after it has been cleaned up and repaired. Covered.
h. Installation costs for telephone and utility services at temporary residence. These costs could include any deposits required by utility companies. Garbage pickup is an important part of your temporary space. All of it is covered. If you have cable TV at home, even cable hookups will be covered.
What if you were able to stay with your relatives and not have to pay more rent or any of the other expenses mentioned above? You may not wish to document all your expenses. You have the option of being paid “Fair Rent Value”, which is the fair rental value of the part of the “residence premises” where you live less any expenses that are not continued while the premises is unfit to live in.
What would the rent of your house be? This is the question.
It is necessary to compare your home to the one before the loss and the properties in your neighborhood. These comparable properties can be substantiated by a good real estate broker. They will also help you determine the monthly cost of these properties. After determining the Fair Rental Value, subtract any expenses that will not continue during restoration, such as utilities, garbage pickup, landscaping or maid service.
Insurance companies may still cover additional transportation costs, relocation expenses and storage of contents, as well as Fair Rental Value. Some insurance companies will let you choose between ALE and Fair Rental Value. Ask your insurance company about their plans and then make your decision.
Navigate to the Resource Box and click on the Resources tab. Print the ALE worksheet. Make as many copies as necessary. It can be used as a guideline to help you record and submit your ALE claims.
Contact your credit card companies, utility companies, and other creditors to get copies of your bills. These records will be required to confirm your normal operating costs.
Final note: Do not be surprised if your claims examiner or adjuster attempts to disqualify certain legitimate expenses. Do not accept the claims examiner’s word. You should fight for it if you believe that the expense is legitimate. Talk to your supervisor about the matter. Keep fighting. You must send them a letter insisting that they provide you with a written denial of all legitimate expenses. Once you have this document, contact your state Department of Insurance (DOI), and file a complaint in writing. It is impossible to predict the impact that a DOI complaint could have on your claim.
