The additional living expense is something that is explained in residential insurance policies. Also known as ALE, this amount will be used to reimburse you in the event that you incur expenses over and above those of normal living due to being the victim of a covered peril.
Scenarios Where ALE Would Apply
If there is a fire in your home that renders it unlivable, you will need to seek other accommodation in the form of a rental, whether that is another residence, a motel room or a room in a relative’s home. Because you must continue to pay your mortgage while you also pay for other accommodation, this can mean significant out-of-pocket expense.
Additional expenses to accommodation can also be incurred. For example, if you have a pet, but your temporary accommodation does not allow pets, you may have to rent space for them elsewhere. The same is true if you are unable to find accommodation near to where you live, which can cost you more in gas if you need to commute to your place of employment.
Document, Document, Document
The good news is that several items, including food expenditures, which occur over your normal food expenditure, are considered to be additional living expenses and are thus reimbursable. However, the ALE is also known as an ‘as incurred’ expense. This means that all expenses must be documented in order to receive reimbursement from your insurance company.
Keeping receipts is a great way to document ALE expenses. A receipt not only contains information about how much you paid for items, but it also includes the date on which those items were purchased. Date information can be cross-referenced with the date that damage occurred to your home, further proving that your expenses are reimbursable.
However, many receipts given today tend to deteriorate in some way over time, rendering them illegible. As such, it may be a good idea to take a photo of the receipt on the day you received it, just in case this deterioration does occur before you are able to submit your receipts to your insurance company.
The Role of Your Public Adjuster in ALE Claims
A public insurance adjuster can help you with the documenting of all of your ALE expenses. They can provide you with a second pair of eyes, highlighting any additional expenses that you may not have been aware of. Your insurance adjuster can also work with your insurance company to get you the most possible compensation for all of your losses.
However, using the ALE to its full advantage really does begin with you. It’s important to check your insurance policy to see just how much ALE coverage it provides you with. A good rule of thumb is to figure out approximately how much it would cost you to live outside of your home for one year. If the ALE coverage you currently have wouldn’t fund this, then you likely will need to increase your limit. The best time to check your policy is before something happens to you or your property as the result of a covered peril.
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