Having a house fire is never a pleasant experience, even if the fire is small. The smallest fire in a house can cause smoke damage to the entire home and everything in it and could cause you to have to move out of your home. If this ever happened, you would be fully protected if your homeowner's insurance policy included additional living expense (ALE) coverage. Here are several things to know about ALE coverage
What It Is
ALE coverage is something you can add to almost any homeowner's insurance policy, but it is probably a type of coverage you will never use. You would, however, need it if your house experienced a fire, like the one described above. If you are forced to move out of your house for a reason like this, it will be your ALE coverage that will provide compensation to you for the expenses you will have during the time you cannot live in your home.
What It Covers
There are many things that an ALE package will cover, but the primary thing it covers is the cost for a new place to live. If you must continue paying your mortgage payment at your home during this time and have to rent a place to live, the ALE coverage will pay for the cost of the monthly rent at the new place you must live.
ALE coverage will also pay for added expenses you now have during the time you must live away from your house, including meals, clothing, incidentals, and increased costs of gas to get to and from work. It may also provide coverage for laundromat fees, if you do not have a washer and dryer to use anymore and dog boarding fees, if you cannot bring your do to your new place.
How It Works
It is very important to understand how ALE works if you ever need to use it, as many people get confused about it. ALE basically covers added expenses you now have due to not being able to live in your house, but it takes your current lifestyle into consideration. For example, if you live in an average three-bedroom house and then rent a six-bedroom lake house to live in during the few months you cannot live in your house, the ALE coverage is probably not going to pay for the cost of a house like this, simply because it is not what your normal living situation is like.
If you have questions about ALE or would like to add it to your policy, you can contact a homeowner's insurance agent to learn more about it.