Additional Living Expenses

A home insurance policy is designed to protect you against more than liability claims, losses and property damage. Your homeowner, condo, or tenant insurance also includes coverage for expenses incurred if you have to leave your home due to an insured loss.

Additional Living Expenses – What’s Covered?

Also known as ALE, Additional Living Expenses coverage will protect you against out-of-pocket costs that you may incur if your home is uninhabitable as a result of damages that are covered under your existing home insurance policy.

Most Ontario home insurance policies provide three categories of ALE coverage, including:

1. Additional Living Expenses: This helps to reduce the financial burden related to living away from your home while repairs are being made by covering extraordinary costs such as:
   • Hotel bills
   • Restaurant meals
   • Laundry
   • Rent
   • Mileage
   • Pet boarding
   • Storage

    
   Remember to keep all your receipts, and speak with your broker for more details on coverage.

2. Rental Income Loss: If you rent out a portion of your home (such as a room, apartment, or suite) and your rental unit is rendered unlivable by an insured event, your home insurance policy may provide reimbursement for any lost rental income.
3. Prohibited Access: If you are temporarily prohibited from living in your home as a result of an emergency in your neighbourhood such as a natural disaster, you may be able to claim ALE – even if there’s no damage to your home.

Coverage Limits

Additional Living Expenses coverage pays for the costs to maintain your normal standard of living while you are temporarily relocated. Your ALE coverage will cover the expenses of a comparable lifestyle; limits vary with each policy and insurance provider, as do time limits on coverage.

In most cases, the combined total ALE limit for all of the above three categories is 20% to 30% of the replacement cost coverage on your home insurance policy. So for example, if the replacement value of your home is listed on your policy as $500,000, the maximum Additional Living Expenses coverage would be $100,000 to $150,000.

When Does Additional Living Expense Coverage Apply?

Generally speaking, eligibility for ALE is activated under most home insurance policies when an insured peril renders your home uninhabitable.

For example, if your home has been damaged by fire or fire-related damage such as flooding, you would be covered under ALE from the time the fire occurred right up until you were able to move back in.

Additional Living Expense coverage may also be activated in special circumstances that prevent you and your family from residing in your home, such as an emergency evacuation order issued by a municipal, provincial, or federal authority. You could be ordered to evacuate your home due to widespread flooding, forest fires, or a catastrophic event such as a chemical spill in your neighbourhood.

For details on the specific situations and perils that trigger Additional Living Expense coverage on your homeowner insurance policy, contact one of our brokers here at Mitchell & Whale. We’ll help you understand your existing coverage, review quotes, and find the right protection for you and your family.